Caledonia Mining Corp (LON:CMCL, TSE:CAL) cheered investors with a 22% increase in the annual dividend, reflecting confidence that earnings and cash flow will increase.
The operator of the Blanket gold mine in Zimbabwe declared an increased quarterly payout to US$0.01375 a share, representing an annualised dividend of 5.5 cents per share compared to the previous annualised dividend of 4.5 cents.
Chief Executive Steve Curtis, said: "The declaration of the increased dividend reflects the company's confidence that its earnings and cash generation will increase.
"In late March 2016, production started from the Blanket ore bodies below 750 meters following completion of the No. 6 Winze.
"In March 2016, the decline development into the AR South ore body below 750 meters was also completed and further improved Blanket's operational flexibility. I am now increasingly confident that the projected production targets of 50,000 ounces in 2016 and 65,000 ounces in 2017 will be realised.
"The planned increases in production in 2016 and 2017 are expected to result in a lower average cost of production as fixed costs are spread across an increased number of gold ounces.
"Approximately 80 per cent of Blanket's costs and 100 per cent of Caledonia's costs are fixed and the marginal cost is approximately $160 per ounce."