Caledonia Lifts Annual Earnings Guidance On Increased Incentive

4th Apr 2018 10:28

LONDON (Alliance News) - Caledonia Mining Corp PLC said Wednesday that its Blanket gold mine located in Zimbabwe has received funds in line with the increased level of export credit incentive for gold produced in February.

In February, the Reserve Bank of Zimbabwe increased the export credit incentive paid to all gold miners to 10% from 2.5%.

The increase in export credit incentive is expected to amount to additional income of USD5.1 million for the year to December 31 for the company, assuming that the incentive remains in place for 2018 and assuming a gold price of USD1,260 per ounce.

The incremental revenue is likely to have a material positive impact on Caledonia's forecast earnings per share for the year.

Caledonia now expects annual earnings per share to be between 165 and 190 cents per share based on the new 10% incentive. In March, the company said earnings per share for the current year is expected between 130 cents and 150 cents per share based on a 2.5% incentive.

"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," Chief Executive Steve Curtis said.

Shares in Caledonia Mining were trading 4.2% higher at 560.00 pence.

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