- March 5, 2019
- Posted in LOCAL
AIM-listed mining group, Caledonia Mining Corporation, says its earnings per share will decline by approximately US$5,4 million after the Reserve Bank of Zimbabwe (RBZ) withdrew the export credit incentive scheme for gold producers.
The export incentive was introduced by the apex bank in 2016 under the bond note facility to encourage businesses to increase exports.
However, in his recent 2019 Monetary Policy Statement, RBZ Governor Dr John Mangudya announced the removal of the export incentive programme.
He said going forward the monetary authority was permitting inter-bank trading of currency held in the local banking system known as RTGS dollars and currency held in foreign currency accounts (FCA), which is capable of being used for payments outside Zimbabwe.
“Caledonia Mining Corporation Plc (“Caledonia” or the “Company”) announces that following the announcement of a revised monetary policy by the Reserve Bank of Zimbabwe, the export credit incentive programme for Zimbabwean gold producers will be withdrawn, it is estimated this will reduce Caledonia’s earnings per share (calculated on an IFRS basis) for 2019 and thereafter by approximately US$5,4 million or 40 to 46 United States cents per share,” Caledonia said.
The RBZ had operated an export incentive programme in terms of which Zimbabwean gold producers received a premium to the international gold price.
The premium was initially at a level of 2,5 percent of gold revenues, which was subsequently increased to 10 percent and more.
“The effect on Caledonia’s earnings per share for 2019 is calculated assuming a gold price of $1 300 for the remainder of the year, that Blanket (mine) achieves the production guidance for 2019 as announced on January 14, 2019 of between 53 000 and 56 000 ounces of gold and that there are no changes in Blanket’s operating costs.”
The miner said the export incentive revenues were received into the company’s RTGS bank account and were not eligible for remittance outside Zimbabwe with a specific allocation of foreign exchange by the RBZ.
Blanket Mine is Caledonia’s local operation located in Gwanda.
Last year Blanket Mine produced 54 512 ounces of gold in line with the miner’s projected annual target, which ranged between 54 000 and 56 000 ounces._The Chronicle