Caledonia Mining Corporation (CMCL)

[mortalmyth]

NyBob, I'll be curious to see what Caledonia plans for the near to medium term with their current cash reserves and future profits from the 49% ownership share of the Blanket mine proceeds.

1) The company has recently identified the 5% dividend for a Jan/Feb timeframe, which will run ~$2.5M out of the ~$24M current cash reserve.

2) After considering the recent Blanket announcement for the No. 6 Winze ($4.4M over 3 year period), the on-going satellite project build and exploration efforts (~$2.0M over next 2 years), and the additional build out at the 750m connector shaft and explorations within Blanket proper it looks like Caledonia should get close to $7M per year in resulting profits by just maintaining the current gold production rate of 40K oz per year (however, the gold price is expected to increase, as well as the mining production level over time).

3) So, it looks like the dividend payout will be offset by the year end profit from Blanket which will essentially leave the cash reserve about the same as it is today at ~$24M. The question then is what is the cash reserve going to be used for since the Blanket profits should keep a steady income stream going into it. Will the company buy another gold producing mine in Zim or another country, or will they use much of it for NAMA exploration and towards the construction a copper/cobalt production capability?

Regardless, it will be interesting to see what they decide to do.

Have a good one.