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LONDON (Alliance News) - Caledonia Mining Corp Wednesday said it will use the US dollar in its financial reports going forward rather than the previously used Canadian dollar, which it said should help the company better demonstrate its performance at the Blanket mine in Zimbabwe.
The miner is based in Canada, with listings on AIM, the Toronto Stock Exchange and on the American QTCQX, but its main asset is its 49% stake held in the Blanket mine in Zimbabwe.
On Wednesday, Caledonia said it will now use US dollars to report its results going forward, abandoning its previous method of using Canadian dollars, in order to reflect the company's true focus.
The Canadian dollar has also recently weakened against the US Dollar, making it more difficult for the company to demonstrate its performance.
All revenue and costs associated with the Blanket mine are in US dollars, with Zimbabwe being a 'dollarised' country since 2009, meaning the country uses US dollars in order to keep currency fluctuations more stable.
In addition, only a very small proportion of Caledonia's other costs are denominated in South African rand or pounds, giving the company further reason to convert its reporting style to US dollars - with the company's results for the fourth quarter of 2015 and for the full year set to be the first two sets of report to adopt the new policy.
Importantly, Caledonia said its current quarterly dividend of 1.5 Canadian cents will be maintained, with the next quarterly dividend expected to be paid in January 2016 maintaining "the current value of the Canadian dollar-denominated dividend payment in US dollar terms."
Based on current exchange rates, Caledonia said the quarterly dividend equates to around 1.09 US cents, but said it will make a further announcement in January.
Caledonia remains on track to produce around 42,000 ounces of gold in 2015 with operating costs in line with expectations, as it moves towards its aim to increase production up to 80,000 ounces of gold per year by 2021.
Caledonia shares were trading down 1.3% to 38.0 pence per share on Wednesday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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