Exploration and development company Caledonia Mining expects to receive up to an additional $5.1-million in income this year, following an increase to 10%, from the previous 2.5%, in Zimbabwe’s Export Credit Incentive (ECI).
The ECI increase was implemented in February.
Caledonia, which owns a 49% interest in the Blanket gold mine, in Zimbabwe, has already received funds commensurate with the higher ECI for gold produced in February.
The company, whose equities are listed on the TSX, NYSE American and with depositary interests in the shares trading on London’s AIM, on Wednesday said the incremental revenue is likely to have a material positive impact on its forecast earnings per share (EPS) for the year, with the previously guided EPS forecast of between 130c and 150c based on an ECI of 2.5%.
With the increased ECI, Caledonia’s EPS for this year are expected to be between 165c and 190c.
“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 Caledonia CEO Steve Curtis.
He added that, as a substantial investor in and producer of gold in Zimbabwe, Caledonia and its fellow shareholders in Blanket are a beneficiary of this and other recent policy changes as the company invests to grow production at Blanket to 80 000 oz by 2021.
“As the business environment in Zimbabwe continues to improve we look forward to evaluating further opportunities to grow production,” Curtis noted.
– Mining Weekly