Strong dividend increase and expansion as well as clever financing round at these companies! – columns

Gold continues to gain tailwind, according to a statement by Fed chief Jerome Powell, who said that because of the current corona situation, the world would still have difficult months ahead.

Further measures to support the economy are to be expected which, conversely, should give the gold price further tailwind!

Good news for the shareholders of Caledonia Mining Corporation Plc. (ISIN: JE00BF0XVB15 / TSX: CAL). The board of directors of the gold producer active in Zimbabwe has approved the fourth quarterly dividend increase for five consecutive quarters. The increase is currently 10 percent over the previous quarterly dividend and increases to $ 0.11 for each share in the company. Compared to the first increase in October 2019 at a starting level of 6.875 cents, this even corresponds to a cumulative dividend increase of no less than 60%.

CEO Steve Curtis was pleased to announce the new 10% increase and emphasized:

“The Executive Board’s decision to increase the dividend reflects our continued and growing confidence in the good business prospects.”

Increasing production, the high price of gold and good cost control continuously led to increased cash generation, which in turn makes the board of directors confident that a higher level of dividend payments can be maintained. And this even before the new ‘Central’ shaft goes into operation, which further lowers production costs and increases production volume!

Precisely because business continues to develop excellently, supported by strong production and a fixed gold price, Curtis is confident about further dividend increases in the future.

“We are nearing the end of the six-year investment program for the ‘Blanket’ mine and therefore assume that the combination of rising production and falling investments will give us the scope for further dividend increases over the next two years, despite the exploration costs of the new projects ‘Glen Hume’ and ‘Connemara North’. “

CEO Steve Curtis

New central shaft ensures a full increase in production!

The central shaft is expected to go into operation in the first quarter of 2021, with a cumulative production of 61,000 to 67,000 ounces of gold in 2021 and around 80,000 ounces of gold per year from 2022.

Caledonia’s strategy to maximize shareholder value consists, among other things, of a quarterly dividend policy, which the Management Board decided in 2014. The Board of Directors will factor in future dividend increases if these appear appropriate in line with its prudent approach to risk management.

Another exploration project secured in Zimbabwe!

In addition, Caledonia Mining has concluded another option agreement. This gives the gold producer the right to explore the mining claims in an area known as ‘Connemara North’ and then, after successful exploration, to acquire them at their own discretion. Like the Glen Hume project, the property is located in the Gweru mining district of the Zimbabwe Midlands, where significant amounts of gold have been produced in the past.

More precisely, the new optional property is located just 30 km from ‘Glen Hume’, has good road connections and offers the potential for operational synergies, should Caledonia decide to start production in these two areas.

‘Connemara North’ is the northern portion of the currently closed ‘Connemara’ mine, which was previously owned by First Quantum Minerals. The mine was put into the maintenance and repair condition from 2001 and sold in 2003. Since then there has been no more commercial mining. Previously, the mine produced approximately 20,000 ounces of gold annually in open pit leach operations.

Earlier publications by First Quantum show that the intention was to expand the existing open pit in the mine, even though the gold price at that time was only around 300 USD / ounce!

Steve Curtis is pleased with this option agreement and the right to explore and subsequently acquire mining claims on the property:

“’Connemara North’ is part of a larger area that housed a previously operational mine with great potential that has been idle for 20 years. In addition, Connemara North is in close proximity to the Glen Hume property, for which we have already acquired an option. We are delighted with the courtesy of these two properties. If the evaluation work proves successful and our exploration programs produce positive results, Caledonia will have a great opportunity to establish itself in the highly prospective Zimbabwe Midlands. This enables us to achieve significant operational synergies between the two locations. “

Specifically, Caledonia Mining may explore the area for a period of up to 18 months and thereafter, if the exploration is successful, may acquire the mining claims in the area at its sole discretion. The total purchase price includes an initial payment of USD 300,000, followed by a further payment of USD 5 million, which can be paid in treasury stock or in cash. The seller can make this decision himself shortly before the transaction. Caledonia has also agreed to pay the seller a net smelter royalty of one percent related to the Connemara gold production.


Caledonia Mining continues to grow, and that from its own free cash flow! This is especially fun as a shareholder, especially when you pay such generous dividends as this company!

There is also good news from the Canadian exploration and development company Osisko Metals Incorporated (ISIN: CA6882741094 | TSX-V: OM) to report. As the company announced, its previously announced royalty financing has already been concluded. As a result, Osisko Gold Royalties Ltd. increased its already existing “Net Smelter Returns” license fee from the “Pine Point” project by a further 0.5% for a payment of 6.5 million CAD.

After this extended “NSR” came into effect, Osisko Gold Royalties now holds a 2% “NSR” license fee on the products manufactured on the project, which is not subject to the buyback right in favor of Osisko Metals.

Osisko Metals has also completed its previously announced, non-brokered private placement that has sold a total of 4,130,250 units of the company at a price of $ 0.48 per unit for total gross proceeds of $ 1,982,520. Each unit consists of one common share of the company and one-half warrant, with each full warrant entitling the holder to purchase one additional common share within two years at a price of $ 0.58 per share.

The net proceeds from the ‘Offering’ will be used to develop the ‘Pine Point’ project by Osisko Metals, in particular for drilling and hydrogeological studies as well as for general corporate purposes.

As insiders, Robert Wares and Osisko Mining Inc. each subscribed 1,250,000 units, which corresponds to a subscription amount of 1.2 million CAD. All securities issued as part of the offering are subject to a four-month hold period that expires on May 1, 2021.

You will find further interesting information on the subject of precious metals and the corresponding companies HERE, in the current, free precious metal report that Swiss Resource AG has made available to us. Take a look at the report, it’s worth it!

many Greetings


Jörg Schulte

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