The Bonds were issued to Blanket in 2008 by the Reserve Bank as consideration for gold delivered by Blanket. The Reserve Bank's inability to pay in cash for gold deliveries eventually forced Blanket to suspend production in October 2008 due to the shortage of foreign currency to purchase consumables.

In January 2009, outstanding amounts due to Blanket (and other gold producers) were converted into the Bonds which matured on 1 February 2010 and accrued interest at 8% per annum.

In a statement issued today, the Reserve Bank has advised that all Bonds will be rolled over for a further 6 months pending the outcome of "constructive engagements" between the Bank and the Zimbabwean Ministry of Finance in respect of the Zimbabwean Government's Reserve Bank-held debt.

The Reserve Bank also states that "various other initiatives are being pursued to meet all outstanding obligations".

Blanket's cashflows continue to suffer from the combined effects of the late repayments of substantial amounts due from the Zimbabwe Revenue Authority for outstanding VAT refunds, and the continuing unscheduled power outages, the frequency and duration of which has increased in recent weeks.

Caledonia says provision will be made against the Reserve Bank bonds in the financial accounts for 2009, which will be released by March 31 2010.

Story provided by Business Financial Newswire