Caledonia Mining Corporation PLC (LON:CMCL TSX:CAL) has predicted a material boost to earnings this year due to changes in Zimbabwe’s export credit rules.
The Reserve Bank of Zimbabwe raised the Export Credit Incentive (ECI) paid to all gold miners to 10% from 2.5% in February.
Assuming gold remains at US$1,260 per oz, the benefit might be an extra US$5.1mln over the full year to December, said the miner, which owns 49% and runs the Blanket gold mine.
That will have a material positive impact on Caledonia’s forecast EPS for the year, it added.
Caledonia had previously forecast earnings of between 130c and 150c per share for 2018 based on an ECI rate of 2.5%, but with ECI at 10% that forecast has been raised to between 165c and 190c per share.
Steve Curtis, Caledonia’s chief executive, said: “The increase in the ECI from 2.5% to 10% is a further significant step by the Zimbabwean Government to boost investment and production in the gold mining sector.
“It is very pleasing to see the government delivering on previous policy statements to promote investment in the sector.”
Source: ProActive Investors