Caledonia Minerals has warned that its Blanket gold mine in Zimbabwe could see lower profitability and cash generation than current market expectations if proposed changes to the country's gold royalty and tax regimes are implemented.
The company acknowledged the proposed fiscal measures announced in Zimbabwe's 2026 National Budget, which include two key changes relevant to gold producers.
The first is an increase in the royalty rate from 5% to 10% when the gold price exceeds $2,500 per ounce, with the higher rate understood to apply to the full gold price.
The second is a change to the tax treatment of capital expenditure, where the current 100% upfront deduction would instead be spread over the life of a project, affecting the timing—but not the total amount—of tax payable.
Caledonia said it is assessing the implications of the proposed changes for its portfolio of assets, including the potential effects on the recently announced economics of its Bilboes gold project.
The company stressed its long-standing operating presence in Zimbabwe and noted it continues to engage constructively with relevant authorities regarding the proposed fiscal measures.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
