Caledonia Mining Corporation Plc: Zimbabwe government amends proposed changes to the royalty and tax regimes

Rhea-AI Summary

Caledonia Mining (NYSE AMERICAN/AIM/VFEX: CMCL) reported that Zimbabwe amended proposed 2026 budget changes affecting gold miners. On 17 December 2025 the finance minister revised measures: the planned royalty hike from 5% to 10% will only apply if the gold price exceeds US$5,000/oz (previously $2,500/oz); the proposal to spread capital expenditure tax deductions over project life has been withdrawn; and a proposed 15% withholding tax on offshore loan interest has been withdrawn.

Caledonia says the revised measures are not yet law but are expected to be enacted before year end and should leave the company’s financial outlook unchanged provided the gold price remains below $5,000/oz. Management welcomed the revisions as supportive of mining and future projects.

Positive

• Withdrawal of capital expenditure deduction change preserves 100% upfront tax treatment
• Withdrawal of proposed 15% withholding tax on offshore loan interest protects Bilboes financing plans
• Revised royalty threshold raised to $5,000/oz, reducing near-term royalty risk
• Company expects no change to financial outlook if gold price stays below $5,000/oz

Negative

• Royalty rate would still rise to 10% if gold price exceeds $5,000/oz
• Revised measures are not yet ratified by parliament and remain subject to enactment

Key Figures

Previous royalty rate 5% Existing gold royalty rate referenced in budget proposals

Initial proposed royalty 10% Rate when gold price exceeds US$2,500/oz in earlier proposal

Initial gold price trigger US$2,500/oz Original threshold for higher royalty rate

Revised gold price trigger US$5,000/oz New threshold for 10% royalty rate

Capital expenditure deduction 100% Upfront tax deductibility retained after proposal withdrawn

Proposed withholding tax 15% Withholding tax on interest for offshore loans, now withdrawn

Budget year 2026 Zimbabwe National Budget affecting gold miners

Dates of key announcements Dec 1 & Dec 17, 2025 Original and revised Zimbabwe budget proposals

Market Reality Check

$27.17 Last Close

Volume Volume 151,583 is below the 20-day average of 242,022 (rel. volume 0.63). low

Technical Price $23.96 is trading above the 200-day MA of $22.34.

Peers on Argus

CMCL fell 2.28% with mixed peer moves: GAU -0.41%, IAUX -3.25% versus ODV +1.91% and DC +1.79%, indicating stock-specific factors rather than a broad gold-sector move.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 16	ATM usage update	Neutral	+1.6%	Confirmed no securities issued under existing ATM agreement period.
Dec 10	Holder threshold change	Neutral	-1.0%	BlackRock crossing AIM relevant-change threshold in voting rights.
Dec 01	Zimbabwe fiscal proposals	Negative	-14.4%	Proposed royalty hike and less favorable tax treatment in Zimbabwe.
Nov 28	Bilboes presentation	Neutral	+0.7%	Reminder of remote presentation on Bilboes feasibility study.
Nov 25	Bilboes feasibility study	Positive	+2.6%	Decision to proceed with Bilboes after feasibility metrics disclosed.

Pattern Detected

Recent news-driven moves have mostly aligned with the tone of announcements, with a sharp selloff on adverse Zimbabwe fiscal proposals and modest gains on positive Bilboes developments.

Recent Company History

Over the last month, CMCL has focused on Zimbabwe fiscal policy and the Bilboes Gold Project. On Nov 25, a feasibility study with strong project economics for Bilboes was published, followed by a Nov 28 presentation reminder. On Dec 1, proposed Zimbabwe tax and royalty hikes prompted a sharp negative price reaction. Subsequent disclosures covered a technical report and shareholder changes, and on Dec 16 the company confirmed no issuance under its ATM. Today’s revision to Zimbabwe’s budget proposals directly updates the adverse changes flagged on Dec 1.

Market Pulse Summary

The stock surged +12.2% in the session following this news. A strong positive reaction aligns with the improved fiscal backdrop from Zimbabwe’s revised 2026 budget proposals. Earlier news on Dec 1 about higher royalties and less favorable tax treatment prompted a -14.41% move, so easing those changes reduces a previously identified headwind. With CMCL trading above its 200-day MA and past news reactions largely aligned with fundamentals, attention would likely stay on execution at Bilboes and any further policy adjustments.

Key Terms

royalty rate financial

"The proposal to increase the royalty rate from 5% to 10% when the gold"

A royalty rate is the percentage or fixed fee a company pays the owner of an asset—such as a patent, trademark, mineral right or copyrighted work—each time it sells products or uses that asset. Think of it like rent or a commission the asset owner charges for use; higher rates reduce the user company’s profit on those sales and can materially affect cash flow, margins and valuation, so investors watch them to gauge future profitability and risk.

capital expenditure financial

"The proposed change to the tax treatment of capital expenditure whereby the"

Capital expenditure is the money a company spends to buy, upgrade, or maintain long‑term physical items such as buildings, machinery, vehicles, or major software systems that it will use for years. It matters to investors because these investments shape future earnings and use up cash today — like a bakery buying a bigger oven to bake more bread; high or sustained spending can signal growth plans but also reduces short‑term cash and affects valuation and returns.

withholding tax financial

"The proposed change to levy withholding tax at 15% on interest payable"

Withholding tax is a government-required portion of a payment—such as dividends, interest, or salary—that the payer keeps back and sends directly to tax authorities before the recipient receives the money. For investors it reduces the cash they actually get and changes the after-tax return on an investment; rates and refund or credit rules vary by country and can materially affect comparisons between similar investments, like a cashier holding part of a bill to cover taxes.

offshore loans financial

"withholding tax at 15% on interest payable on offshore loans has been"

Offshore loans are borrowings arranged through lenders or financial entities located in a different country than the borrower, often using foreign banks or special-purpose companies. Think of it like taking a loan from a bank in another town: it can offer different interest rates, currency options, or tax treatment, but also adds layers of legal, regulatory and currency risk that investors should consider when assessing a company’s debt and transparency.

AI-generated analysis. Not financial advice.

ST HELIER, Jersey, Dec. 19, 2025 (GLOBE NEWSWIRE) -- On December 1, 2025 Caledonia Mining Corporation Plc (“Caledonia” or “the Company”) (NYSE AMERICAN, AIM and VFEX: CMCL) issued an announcement regarding proposed changes to the royalty and tax regimes, as they apply to gold miners, in the Republic of Zimbabwe’s 2026 National Budget. The proposed changes related inter alia to royalties and tax deductibility of capital expenditure.

Caledonia notes that, on December 17, 2025, the Zimbabwe Minister of Finance announced certain changes to these proposals in the second reading of the 2026 National Budget to the Zimbabwe parliament, specifically;

• The proposal to increase the royalty rate from 5% to 10% when the gold price exceeds US$2,500 per ounce will now only apply should the gold price exceed $5,000 per ounce.
• The proposed change to the tax treatment of capital expenditure whereby the current 100% upfront deduction would instead be spread over the life of the project, affecting the timing, but not the total amount of tax payable, has been withdrawn.
• The proposed change to levy withholding tax at 15% on interest payable on offshore loans has been withdrawn. Whilst this provision would have had little effect on Caledonia’s existing operations, it would have had an adverse effect on the Bilboes Gold Project, which Caledonia currently expects to fund with a large proportion of offshore debt.
  
  

The revised proposals, which have not yet been ratified by parliament, but are expected to be enacted before the end of the year, should result in no change in the financial outlook for Caledonia’s portfolio of assets in Zimbabwe provided the gold price remains below $5,000 per ounce.

Mark Learmonth, Chief Executive Officer of Caledonia, commented:

“The 2026 National Budget of Zimbabwe is yet to be enacted into law. However, we welcome the revised provisions announced this week which we believe demonstrate the Government of Zimbabwe’s support for the mining sector and the development of future mining projects in the country.”

Enquiries:

Caledonia Mining Corporation Plc Mark Learmonth Camilla Horsfall	Tel: +44 1534 679 800 Tel: +44 7817 841 793
Cavendish Capital Markets Limited (Nomad and Broker) Adrian Hadden Pearl Kellie	Tel: +44 207 397 1965 Tel: +44 131 220 9775
Camarco, Financial PR (UK) Gordon Poole Elfie Kent	Tel: +44 20 3757 4980
Curate Public Relations (Zimbabwe) Debra Tatenda	Tel: +263 77802131
IH Securities (Private) Limited (VFEX Sponsor - Zimbabwe) Lloyd Mlotshwa	Tel: +263 (242) 745 119/33/39

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Information and statements contained in this document that are not historical facts are "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable securities legislation that involve risks and uncertainties relating, but not limited, to Caledonia's current expectations, intentions, plans, and beliefs. Forward-looking statements can often be identified by forward-looking words such as "anticipate", "believe", "expect", "goal", "plan", "target", "intend", "estimate", "could", "should", "may" and "will" or the negative of these terms or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Examples of forward-looking statements in this document include: our expectation that the proposed changes to the royalty and tax regimes will be enacted as set out in this document; and that, as a result, we expect no change to the financial outlook for Caledonia’s portfolio of assets in Zimbabwe. These forward-looking statements are based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results, performance or achievements to be materially different from those expressed or implied by forward-looking statements.

Security holders, potential security holders and prospective investors should be aware that forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Such factors include, but are not limited to: risks relating to estimates of mineral reserves and mineral resources proving to be inaccurate, fluctuations in gold price and payment terms for gold sold, risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological or structural formations, pressures, power outages, fire, explosions, landslides, cave-ins and flooding), risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the group does business, inadequate insurance, or inability to obtain insurance, to cover these risks and hazards, employee relations, relationships with and claims by local communities and indigenous populations, political risk, risks related to natural disasters, terrorism, civil unrest, public health concerns (including health epidemics or outbreaks of communicable diseases such as the coronavirus (COVID-19)), availability and increasing costs associated with mining inputs and labour, the speculative nature of mineral exploration and development, including the risks of obtaining or maintaining necessary licenses and permits, diminishing quantities or grades of mineral reserves as mining occurs, global financial condition, the actual results of current exploration activities, changes to conclusions of economic evaluations, and changes in project parameters to deal with unanticipated economic or other factors, risks of increased capital and operating costs, environmental, safety or regulatory risks, expropriation, the Group's title to properties including ownership thereof, increased competition in the mining industry for properties, equipment, qualified personnel and their costs, risks relating to the uncertainty of timing of events including targeted production rate increase and currency fluctuations, and the other risks discussed in Caledonia's most recent Form 20-F annual report and other filings made with the U.S. Securities and Exchange Commission. Security holders, potential security holders and prospective investors are cautioned not to place undue reliance on forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Caledonia reviews forward-looking statements for the purposes of preparing each announcement; however, Caledonia undertakes no obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new information, future events or other such factors which affect these statements, except as required by law.

FAQ

What did Caledonia announce about Zimbabwe's 2026 budget changes on December 17, 2025 for CMCL?

The minister revised proposals: the royalty hike applies only above $5,000/oz, and proposals to change capital expenditure deductions and a 15% withholding tax on offshore interest were withdrawn.

How will the revised Zimbabwe measures affect Caledonia's financial outlook for CMCL?

Caledonia states the revisions should result in no change to its financial outlook provided the gold price remains below $5,000/oz.

What is the impact of the withdrawn 15% withholding tax on Bilboes financing for CMCL?

Withholding tax withdrawal removes a potential adverse effect on the Bilboes Gold Project, which Caledonia expects to fund with a large proportion of offshore debt.

When would Zimbabwe's royalty rate increase to 10% for gold and how does that affect CMCL?

The royalty would increase to 10% only if gold trades above $5,000/oz, creating a conditional cost risk for CMCL above that price.

Are the revised 2026 budget provisions already law for CMCL operations in Zimbabwe?

No, the revised proposals have not yet been ratified by parliament but are expected to be enacted before year end.