Derivative financial assets

	2020		2019		January 1, 2019

Derivatives not designated as hedging instruments:
Gold exchange-traded fund ("Gold ETF")		1,184		–		–
Gold Hedge		–		102		–
		1,184		102		–

Gold ETF

April 2020

the South African subsidiary, Caledonia Mining South Africa Proprietary Limited, purchased a Gold ETF through Standard Bank Limited at a cost of

$1,058.

The Gold ETF is denominated in South African Rand and the instrument is utilised to invest excess short-term Rands on hand at the South African subsidiary. The Gold ETF's value tracks the US spot gold price and was entered into to offset fluctuations in the South African Rand against the US Dollar. The total expense, representing the change in the Rand tracked USD spot gold price, amounted to

$164

(

2019:

$Nil

) for the

twelve

months ended

December 31, 2020.

Foreign currency translation gains, due to the fluctuations in the Rand against the US Dollar on the translation of the foreign subsidiary, amounted to

$290

(

2019:

$Nil

Gold Hedge

The Company entered into a hedge in

November 2019

at a cost of

$379.

The hedge was in the form of put options in respect of

4,600

ounces of gold for the period

January

June 2020

exercisable at a strike price of

$1,400

per ounce. At

December 31, 2020

the mark-to-market valuation, that represents the fair value of the hedge, amounted to

$Nil

(

2019:

$102,

2018:

$Nil

). The put options were entered into by the Company for economic hedging purposes to ensure sufficient cash availability for Blanket Mine's capital investment plan, rather than as a speculative investment. The hedge expired on

June 30, 2020.

Fair value losses on derivative assets	2020		2019		2018

Gold ETF		164		–		–
Gold hedge		102		601		360
		266		601		360