Caledonia Mining Corporation has finally secured regulatory approval to increase its shareholding in Blanket gold mine to 64%, the company announced on Tuesday.
The Jersey-registered miner, which acquired the Zimbabwean mine in 2006, owned 49% of Blanket after a local ownership transaction concluded in 2012 under the country’s old indigenisation law.
However, Caledonia moved to increase its stake in Blanket in November 2018 after President Emmerson Mnangagwa’s new administration relaxed local ownership requirements on foreign investors.
“Caledonia Mining Corporation Plc is pleased to announce the completion of the purchase of an additional 15 per cent shareholding in Blanket Mine,” the company said in a statement issued on Tuesday morning.
“Today’s announcement marks the completion of the transaction first announced on November 6, 2018, following receipt of approvals from various Zimbabwean regulatory authorities. The purchase of Fremiro’s 15 per cent holding means Caledonia’s shareholding in Blanket is now 64 per cent.”
Consideration for Fremiro’s shareholding in Blanket, US$16.667 million, has been settled through the cancellation of a loan between Fremiro and Caledonia and the issue of 727,266 new shares in Caledonia.
Fremiro will now hold approximately 6.3% of Caledonia.
Caledonia chief executive, Steve Curtis, said Fremiro would continue to play a key role as a shareholder in the holding company.
“I am pleased to report that the Company has concluded its transaction with Fremiro to increase Caledonia’s shareholding in Blanket to 64%. I would like to thank Fremiro for its support as a shareholder in Blanket during the last seven years and am confident that Fremiro, now as a significant shareholder in the Company, will continue to be supportive of Caledonia’s business going forward.”
Other shareholders in Blanket are the government, through the National Indigenisation and Economic Empowerment Fund (16%), staff (10%) and the community share ownership trust, which has a 10% shareholding.
Blanket mine, one of Zimbabwe’s a rare recovery stories, produced approximately 55,182 ounces of gold in 2019 after a record-breaking final quarter which saw output rising 24%. The mine’s 2019 output exceeded Caleldonia’s revised production guidance of 50,000 – 53,000 ounces.
The company expects to commission a new central shaft in the last quarter of 2020, which is expected to ramp up production to 80,000 ounces per year.
