Gold producer Caledonia Mining Corporation has declared a dividend of $0.075.

On April 1, the board deferred the decision to declare the quarterly dividend in light of the uncertainty surrounding the Covid-19 pandemic.

The board says it has been encouraged by the continued operations of the Blanket mine, in Zimbabwe, and the reopening of important supply lines, and has therefore declared a dividend.

A strong balance sheet with current cash on hand of $14.1-million at April 24, gives the directors sufficient confidence in the solvency of the business and its resilience in the current macroeconomic environment, the company notes.

The dividend will be paid on May 29.

A key consideration in the decision to defer the April dividend was uncertainty relating to Blanket’s supply chain from South Africa. During the initial lockdown, Blanket operated using its inventories of consumables and spare parts.

However, the South African mining industry and its allied supply sector is restarting operations and Blanket has partially resumed the procurement of consumables and equipment despite the lockdown period being extended.

Blanket has operated throughout the 21-day lockdown in Zimbabwe which came into effect from March 30, with permission from the government.

During this period, Blanket has modified its operating procedures to safeguard against the spread of Covid-19 resulting in Blanket operating at about 93% of its target production rate.

The Zimbabwe lockdown has been extended by a further 14 days, but Blanket, and the Zimbabwean mining industry in general, has been granted special dispensation to continue operations.

Blanket continues to support initiatives to combat the spread of Covid-19 in Zimbabwe. It has donated ZWL16-million via the Chamber of Mines Zimbabwe to assist in the fight against Covid-19 and has committed to make further weekly donations of ZWL5-million to Covid-19-related projects provided it continues to operate at a reasonable level of production; and Blanket has provided practical assistance and supplies to local authorities in its area.