Caledonia Mining Corporation Plc confirmed that Zimbabwe’s 2026 National Budget has been enacted, cementing the company’s earlier position that the higher 10 % royalty rate will only apply when gold prices exceed US$5,000 per ounce. The confirmation removes the uncertainty that had surrounded the company’s cost base and preserves the current royalty framework for its Blanket Mine and Bilboes Gold Project.
The enactment also withdraws other proposed changes to the tax and royalty regime that were highlighted in the company’s December 1 announcement. With the higher royalty threshold set well above the prevailing gold price, Caledonia can continue to rely on its existing royalty calculations without needing to revise its Bilboes Gold Project Technical Report Summary, which was published in November. This regulatory clarity eliminates a key headwind that could have eroded margins and dividend commitments.
Caledonia’s financial performance in the prior year provides context for the significance of the budget outcome. The company reported a net profit of US$17.9 million in 2024, a turnaround from a US$7.9 million loss in 2023, driven by higher gold prices and disciplined cost management. CEO Mark Learmonth noted that the revised proposals would not materially alter the company’s financial outlook for its Zimbabwe assets, underscoring the importance of the confirmed royalty threshold for sustaining profitability.
Investors reacted positively to the confirmation, following a period of volatility that began with a 14.41 % share decline on December 1, 2025, after the initial proposal of a 10 % royalty at a US$2,500 threshold. The subsequent revision to a US$5,000 threshold and withdrawal of other tax changes was welcomed as a tailwind that reduces fiscal risk and supports the company’s long‑term investment plans in the Bilboes project, which is expected to produce an average of 168,000 ounces of gold per year over a 10‑year life of mine.
The outcome reinforces Caledonia’s strategic focus on the Bilboes Gold Project and its broader Zimbabwe operations, providing a stable operating environment that supports continued capital deployment and cost control. The company’s ability to maintain its current royalty regime positions it to capitalize on rising gold prices while mitigating the risk of sudden cost increases that could have impacted its margins and dividend policy.
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