LONDON (ShareCast) - (Sharecast News) - Caledonia Mining Corporation announced on Wednesday that, due to the uncertain business environment around the Covid-19 coronavirus pandemic, its board had decided to defer its approval of the second quarterly dividend for 2020.
The AIM-traded firm said it would keep the decision under constant review, as it monitored prevailing market conditions.

It said production at Blanket was continuing, although at a lower rate than targeted due to the introduction of measures to reduce the risk of infections being transmitted among employees.

Blanket also had consumables and spare parts in its inventory to sustain uninterrupted gold production "well past" the end of the current lockdowns in Zimbabwe and South Africa, the board said.

Caledonia had paid a quarterly dividend since 2014, with the payments described as an "important element" of the company's strategy to create and enhance shareholder value.

Provided the measures taken by the Zimbabwe and South African governments did not result in severe or prolonged interruptions to operations, the effect of such measures should not impede the firm's ability to resume the payment of quarterly dividends, it said.

Caledonia's cash position as at 26 March was $12.5m.

At the current quarterly dividend rate of 7.5 cents per share, the dividend payment that was scheduled for payment in April amounted to around $0.86m, or less than seven per cent of its currently available cash.

"The Covid-19 pandemic has elevated global levels of uncertainty," said chairman Leigh Wilson.

"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 on, 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 able to replenish its supplies of consumables and other items."

Wilson noted that the company's balance sheet remained in "an enviable position", adding that the dividend was still "comfortably" affordable.

"Today's announcement is a continuation of the prudent approach to capital allocation that we have followed for several years - a path that we expect to continue."

At 1007 BST, shares in Caledonia Mining Corporation were down 1.67% at 708p.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE