AIM-listed mining group, Caledonia Mining Corporation, says it has entered into a legally binding sale agreement to acquire Fremiro’s 15 percent shareholding in Blanket Mine, which is based in Matabeleland South.
The move will see Caledonia, which presently owns 49 percent shares, raising its stake in the local gold unit to 64 percent while Fremiro will hold 6,42 percent of Caledonia’s diluted equity.
In August, Caledonia announced that it had signed a Memorandum of Understanding with Fremiro Investments with the intent to acquire Fremiro’s 15 percent stake in Blanket Mine.
“Caledonia is pleased to announce that it has now entered into a legally binding sale agreement with Fremiro. The agreement reflects the terms of the MoU as detailed within the Announcement,” it said.
The conditions to completion of the purchase include, among others issues, approvals from various Zimbabwean regulatory authorities.
The Aim-listed resource group said it was buying Fremiro’s 15 percent shareholding in Blanket for a gross consideration of $16,7 million to be settled through the cancellation of the loan between the two entities, which stood at $11,5 million as at June 30, 2018; and the issue of 727 266 new shares in Caledonia at an issue price of $7,15 per share, being the closing price on the New York Stock Exchange.
Gold continues to be one of the key minerals in Zimbabwe accounting for an estimated 50 percent of mineral exports (employing in excess of 25 percent of formal employment and over 300 000 involved in artisanal gold mining).
Official statistics released by Zimbabwe’s sole gold buyer, Fidelity Printers and Refiners, this week indicate that the country has already surpassed this year’s initial annual target of 30 tonnes as producers have delivered 30,3 tonnes two months before the year ends.
On the back of an improved trajectory in gold production, Government has revised this year’s gold output to 35 tonnes.
Between January and October, primary producers delivered 9,9 tonnes while small-scale miners delivered 20,4 tonnes.