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Caledonia extols RBZ for timeous payments as direct gold exports resume

CALEDONIA Mining Corporation Plc. says the Reserve Bank of Zimbabwe (RBZ) is timeously remitting all due payments for gold sales amid revelations that the miner has commenced direct gold exports to a foreign base refiner.

Since listing on the Victoria Falls Stock Exchange and following completion of the Bilboes acquisition, Caledonia has been looking into various avenues to achieve the direct export of its gold.

Unrefined gold continues to be processed at Fidelity Gold Refinery (Private) Limited, a subsidiary of the RBZ, on a toll-treatment basis, in accordance with requirements of the government of Zimbabwe for in-country refining and also to allow the Zimbabwean authorities full visibility over the gold produced and exported by Caledonia.

Under the arrangement, the exportation of the gold is facilitated by FGR as the holder of a gold dealing licence.

The refined gold held by FGR is then exported to a refinery outside Zimbabwe; the receiving foreign refinery undertakes the final refining process and the gold are sold on behalf of Caledonia.

Caledonia then receives the proceeds of the gold sales directly into its bank account in Zimbabwe within a few days of delivery to the final refinery.

The top miner said this arrangement in respect of production from Blanket Mine complies with the current requirements to pay a 5 per cent royalty and that Blanket continues to receive 75 per cent of its revenues in US dollars and the balance in local currency.

Caledonia Plc CEO, Mark Learmonth commended authorities for their pragmatic business approach underscoring that the RBZ has been very dependable in remitting due payments.

“This arrangement is a big milestone for Caledonia and further demonstrates the pragmatic approach of the Zimbabwe authorities to resolve commercial issues facing gold producers.

“In the 10 years or so during which Blanket Mine has sold its gold in-country, initially to the RBZ, and more recently to FGR, we have experienced very few difficulties in receiving payment within the prescribed period; when difficulties have arisen, they have been resolved rapidly,” he said.

He said this new arrangement should be seen in the context of Caledonia’s planned expansion in Zimbabwe, initially at Bilboes and thereafter at Motapa and Maligreen.

“This new marketing arrangement should make it easier for Caledonia to arrange debt facilities with funders outside Zimbabwe which may be used to support the construction of the new mines,” he added. – (New Zimbabwe)

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