Caledonia heads into revised investment plan
Southern Africa-focused exploration and development company Caledonia Mining Corporation has entered into a six-month cap and collar hedge with a financial counterparty over 15 000 oz of production, using a collar value of $1 050/oz and a cap value of $1 080/oz.
The hedge would provide Caledonia with greater certainty in terms of its cash flow in the period to July 2016, by which time the company expected that operating cash flows at Blanket mine, in Zimbabwe, would benefit from the projected increase in gold production.
Blanket mine had completed the first year of a six-year investment programme which stipulated that the miner would invest $70-million between 2015 and 2021, with the objective of increasing production to about 80 000 oz of gold by 2021.
When the revised investment plan was announced in October 2014, the expected capital investment between 2015 and 2017 was $50-million; it was now expected to be $45-million.
The hedge comprised a series of weekly contracts. If the gold price at the end of each contract fell below the collar value, Caledonia would receive the value of the shortfall below the collar multiplied by the hedged ounces.
If the gold price at the end of each contract fell between the cap and the collar value, Caledonia would pay to the hedge counterparty the excess over the collar value multiplied by the hedged ounces.
If the gold price at the end of each contract exceeded the cap value, Caledonia would pay to the hedge counterparty the difference between the cap and the collar multiplied by the hedged ounces.
No other fees or expenses arose in terms of the hedge.
Blanket mine would continue to sell 100% of its gold to Fidelity Printers and Refiners in Zimbabwe.
Comments
Research Reports
Projects
Latest Multimedia
Latest News
Showroom
Booyco Electronics, South African pioneer of Proximity Detection Systems, offers safety solutions for underground and surface mining, quarrying,...
VISIT SHOWROOM
Booyco Electronics, South African pioneer of Proximity Detection Systems, offers safety solutions for underground and surface mining, quarrying,...
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
