21st Dec 2015 13:21
LONDON (Alliance News) - Caledonia Mining Corp on Monday laid out a proposal to shareholders for the re-domicile of the company to the Channel Islands from Canada.
Specifically, the proposed re-domicile is to Jersey, which would be implemented by a legal process called continuance, which the company hopes shareholders will approve as it believes it will benefit the company.
"The proposal to re-domicile Caledonia from Canada to Jersey is a further step in simplifying our corporate structure, reducing compliance costs and increasing tax efficiency," said Chief Executive Steve Curtis.
If approved, it would mean the company will be governed by the corporate law of Jersey rather than Canada and have a registered office in Jersey. It will tweak its name by changing it Caledonia Mining Corporation PLC.
The main reason for the proposal is the effect of tax on some of the company's shareholders. Under Canadian law, shareholders in the company who do not live in Canada must pay Canadian withholding tax on their dividends - something that would no longer be applicable should the proposal be approved.
Caledonia stressed its current dividend policy to pay 1.5 Canadian cents per quarter would remain unaffected apart from the withholding tax issue. However, the company has already announced it plans to move its accounting methods from Canadian dollars to US dollars from 2016, meaning its 1.5 Canadian cent dividend is equal to around 1.09 US cents.
The company also said Jersey is closer to its operations, with its primary asset being a 49% stake in the Blanket gold mine in Zimbabwe, and said there is no reason to be domiciled in Canada as it has no operations there.
All of the companies listings will also be unaffected by the changes.
Shareholders will be notified of details and a date for the meeting in early January, with the hope of holding the meeting in the following month, it said.
Caledonia shares were trading up 1.3% to 38.50 pence per share on Monday afternoon.
By Joshua Warner; [email protected]; @JoshAlliance
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