Caledonia Mining (LON:CMCL, TSE:CAL) is proposing to re-domicile the company from Canada to Jersey in the Channel Islands.
If the proposal is ratified by shareholders the company will cease to be governed by the corporate law and tax regulations of Canada, where it has no commercial operations.
Canadian withholding tax, which is currently applicable to dividends paid to Caledonia shareholders outside Canada, will be eliminated, the company noted.
The move will have no effect on Caledonia's current dividend policy, which is to pay 1.5 Canadian cents per quarter, while, as previously announced, the company intends to start reporting its results in US dollars, so at present exchange rates the pay-out would be around 1.09 US cents, though the board said a further announcement relating to the dividend would be made early next month.
The company's shares would continue to be traded in Toronto, London and on the OTCQX.
"The proposal to re-domicile Caledonia from Canada to Jersey is a further step in simplifying our corporate structure, reducing compliance costs and increasing tax efficiency,” explained Steve Curtis, Caledonian's chief executive.
"The re-location to Jersey, if approved by shareholders, will result in Caledonia's head office being located in Jersey, Channel Islands, which is more centrally located within the area of Caledonia's operations in Zimbabwe and its shareholder base in Europe, the UK, South Africa and North America,” he noted.
Shares in Caledonia rose 0.5p to 38.5p on the news.