Caledonia in praise of new govt after $5m Reserve Bank boost

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Blanket Mine near Gwanda in Matabeleland South is expected to receive a $5 million boost from the Reserve Bank of Zimbabwe`s Export Credit Incentive (ECI).

The Caledonia Mining Corporation-owned gold concern said the expected revenue will have a positive impact in its financial forecast for the year.

“Caledonia Mining Corporation Plc is pleased to announce that following the 2018 Monetary Policy Statement by the governor of the Reserve Bank of Zimbabwe in February 2018 relating to an increase in the Export Credit Incentive paid to all gold miners from 2.5% to 10%, the Blanket Gold Mine has received funds commensurate with the increased level of ECI for gold produced in February 2018,” read a statement from the company.

“The increase in the ECI from 2.5% to 10% is expected to amount to additional income of approximately $5.1 million for the year to December 31, 2018 assuming that the ECI remains in place for 2018 and assuming a gold price of $1,260 per ounce”

Commenting on the developments, Steve Curtis, Caledonia’s Chief Executive Officer, said the export incentive is a testimony to the Zimbabwean government`s commitment to enhancing growth of the mining sector.

“The increase in the ECI from 2.5% to 10% is a further significant step by the Zimbabwean Government to boost investment and production in the gold mining sector. It is very pleasing to see the government delivering on previous policy statements to promote investment in the sector,” said Curtis.

Curtis said they will be investing $4 million in exploration work at its satellite properties.

“As a substantial investor and producer of gold in Zimbabwe, Caledonia and our fellow shareholders in Blanket are a beneficiary of this and other recent policy changes as we invest to grow production at Blanket to 80,000 ounces by 2021.

“Furthermore, as we have previously announced in our 2017 MD&A Blanket will be investing an additional $4m in exploration and metallurgical test work on its satellite properties. As the business environment in Zimbabwe continues to improve we look forward to evaluating further opportunities to grow production,” he said.