# Caledonia Mining Q&A: Expanding the business into a multi-asset operation in Zimbabwe (LON:CMCL)

- Link: https://www.directorstalkinterviews.com/caledonia-mining-qa-expanding-the-business-into-a-multi-asset-operation-in-zimbabwe-loncmcl/412952151
- Published: 2021-01-08T08:51:38+00:00
- Author: Amilia Stone

**Caledonia Mining Corporation plc** ([LON:CMCL](https://www.directorstalkinterviews.com/company/caledonia-mining-corporation/cmcl.l))
Chief Executive officer Steve Curtis caught up with DirectorsTalk for an exclusive
interview to discuss the increase quarterly dividend, the next steps for the  two
new 2 exploration options, commissioning of the central shaft and what else we can
expect from the company in the coming months.

**Q1: A great start to the new year with the announcement this morning. Steve, 
can you just talk us through the increased dividend?**

**A1**: People familiar with Caledonia Mining will know that we pay a quarterly 
dividend and we’re very happy that we’ve been able to increase this quarterly dividend,
the fourth time since October 2019. This increase is 10% over and above the last
dividend paid in 2020 and cumulatively, this is adding up now to a 60% increase 
in the dividend level since the October level, which was about 6.8 cents a share.

We now are declaring 11 cents a share and we’re very happy to do that, it’s in line
with an indication we gave the market that as we get to the end of our massive capital
expansion project at the Blanket Mine, we would have the ability to distribute more
cash to shareholders.

So, we’re very happy to be able to do that and it’s a great way to start 2021, and
the Board are very happy that we’re in this position showing a lot of confidence
in our business.

**Q2: Last year was a good year for the company too, with two exploration options
announced in December. What are the next steps for these properties?**

**A2**: Well, just to put the exploration option agreements in context, again, we’re
at the end of the five-year expansion program, which was the sinking of a new shaft
and effectively the developing of a new mine.

We’re going to complete the commissioning of that shaft in Q1 and we also indicated
to the markets that we’ve been looking for new opportunities in Zimbabwe and we 
were pleased to be able to conclude two of those right at the end of last year. 
We’ve taken options over pieces of ground in Zimbabwe that we considered to be prospective
and we are going to commence exploration programs.

The one at Glen Hume, the drilling has commenced already in December and we’ve probably
we got a 12 to 15 months exploration program there to hopefully identify a decent
resource.

The other project at Connemara North that has not started physically yet, it was
the last one to be announced, we will decide whether we want to do any sort of preliminary
geophysics; flying drones and things like that, but everything is signed sealed 
and we’re ready to go and we’re very excited.

Importantly, these two projects are about 30 kilometres apart, if they both hit 
the mark, it would be a very nice gold camp that we can produce in the area and 
we look forward to the opportunity to expanding our business from a single asset
operation into a multi-asset operation in Zimbabwe.

**Q3: Now, you also completed equipping the central shaft at the end of last year.
Is it still on track to be commissioned in the first quarter?**

**A3**: Yes, that’s the target and that’s the program that is in place. The equipping
is a process that was completed last year, we’re in the final stages of headgear
erection and then the commissioning phase will commence will be completed during
the Q1 period. Then they’ll just be the managed and gradual ramp up as we change
the whole operational method at the mine by bringing this new central shaft into
operation. Very exciting.

Our old shaft only goes down to 750 meters, very much smaller, lower capacity, the
new shaft is down to 1200 metres, very much higher capacity, much faster, and it
will be completely transformational for the Blanket Mine. We’ve managed to do quite
a lot of lateral development below the 750 metre level while we’ve been sinking 
the shaft so that puts us in a good place whereby, we can start to ramp up the production
to our target of 80,000 ounces by 2022.

**Q4: There’s been so much going on, but is there anything else that we can expect
from Caledonia Mining over the next few months?**

**A4**: Well, obviously, as we finish the commissioning, we will announce that that
has been successfully completed and then we’ll  have our regular quarterly announcements
of production updates and then financial results.

That, hopefully, will show the market that our targets which we have guided for 
2021 have been somewhere between 61,000 and 67,000 ounces is on track. You will 
start to see the slow, quarterly, incremental gold production, which is higher than
what we’ve had in the past and that hopefully will give the market the message that
the project has been successful. We are managing to move more ore and therefore 
produce more gold.

So, in an environment where we we’ve got a higher gold price and hopefully a strong
gold price, this is a very good place to be. We’re very happy that the construction
program has completed at this time and that we’re going into a phase with a high
gold price.

We do have a fair amount of money still to spend this year on the finalisation of
central shaft, key development, underground exploration so we are still investing
Blanket’s free cashflow quite heavily in Zimbabwe but we will start to see the gradual
decline of that over the next few years. That really supports this program of increasing
dividends on a quarterly basis.

Blanket will be producing more gold, will be cash generative at a higher level, 
CapEx demands will be lower and that means there’s more cash available (i) for programs
like the exploration programs and (ii) to return to shareholders.

So, there should be some good news coming out that we can share with our shareholders
over the next few months and 2021 for us is the beginning of a new phase and we’re
very excited about that.

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