- Caledonia Mining Corp (TSX:CAL) has announced it will defer a decision on dividends until Q2 2020
- Production at it’s Blanket project continues, albeit at a lower rate than targeted
- The company applied for special permission to continue operating from the Zimbabwean Government
- Caledonia Mining (CAL) is down 8.9 per cent at $11.84 per share, with a market cap of $150 million
Caledonia Mining Corp (TSX:CAL) has announced it is deferring a dividend decision until later in the year.
Unless conditions improve, it is unlikely the company will be able to post a dividend of C$1.20 per share for the quarter, as it did in January of this year.
Caledonia has paid a quarterly dividend every quarter since 2014,
The company’s Chairman, Leigh Wilson, said the uncertainty in world markets due to COVID-19 was behind the decision to delay.
“I have full confidence that our business will emerge from this situation substantially unchanged, but, out of an abundance of caution, we have decided to defer the dividend decision until we have greater clarity on the wider implications of this highly fluid situation.
“The resumption of dividends will depend upon inter alia, Blanket maintaining a reasonable level of production; receiving payment in full and on-time for all gold sales; being able to make the necessary local and international payments and being to replenish it’s supplies of consumables and other items,” he said.
Caledonia has applied for special permission from the Government of Zimbabwe to continue operations at its Blanket Gold Mine, following the country’s lockdown of non-essential services on March 27.
The company is hopeful they can drop production to between 70 and 80 per cent of targeted levels and keep the mine functioning.
The company was also worried about running out of consumables at the Blanket site, which receives most of it’s supplies from South Africa.
The closure of the South African border last week presented very real logistical challenges to Blanket’s operational viability.
The company now believes it has since stockpiled enough resources and consumables at the site to survive a lengthy shutdown period
“Our balance sheet remains in an enviable position and the dividend remains comfortably affordable” Leigh added.
Caledonia have some $12.5 million in cash and equivalents on the books currently, allowing them to survive for at least a few months without production of any kind.
This owes largely to the historically high gold price of the past 18 months.
Caledonia Mining Corporation (CAL) is down 8.9 per cent at $11.84 per share, as of 9:51 am EST.