eBusiness Weekly
Tawanda Musarurwa
HARARE – AIM-listed mining group Caledonia Mining is moving ahead with its proposed plan to increase its stake in the Blanket Gold Mine after recently signing a Memorandum of Understanding with Fremiro Investments with the intention to purchase Femiro’s 15 percent shareholding in the gold producer.
Caledonia currently holds a 49 percent stake in the Gwanda-based gold mine after complying with the then Indigenisation Act in 2011.
But on completion of the transaction, Caledonia will have an effective 64 percent shareholding in Blanket Mine. The constituent Blanket Mine shareholders are as follows: Wholly-owned subsidiaries of Caledonia (64 percent), NIEEF (16 percent), Blanket Employee Trust Services (10 percent), and the Gwanda Community Share Ownership Trust (10 percent).
Commenting on the transaction Caledonia CEO Steve Curtis said:
“We are delighted to agree a transaction with Fremiro for the purchase of their 15 percent stake in Blanket; they have been a supportive shareholder of Blanket since 2012 and we welcome them as shareholders in Caledonia Mining.
“Blanket is well-advanced on implementing the investment programme which commenced in early 2015 and is expected to result in Blanket achieving an annual production rate of at least 80,000 ounces per annum by 2021, at a low cash cost,” he said.
“We are also very pleased to increase our shareholding in Blanket to a majority stake, moving from 49 percent to 64 percent following this transaction.
“Blanket Mine has been an excellent investment for Caledonia since we originally invested in Zimbabwe in 2006 and we are delighted to be able to increase our shareholding in this outstanding asset.
“Today’s transaction forms an important step in our stated goal of increasing our shareholding in Blanket since the Zimbabwean Government removed the indigenisation requirement for gold mining businesses earlier this year.
“We look forward to evaluating further investment opportunities in Zimbabwe as they become available.”
Analysts at Akribos Research Services see the benefits of such a strategic move going forward.
“This demonstrates that new policies that encourage capital inflows can assist in unlocking the country’s gold production potential.
“Over the past two years, nearly 50 percent of global demand for physical gold has come from the combined Chinese markets and the Indian subcontinent.
“It therefore follows that attracting new investments from China and India could ensure that the nation benefits from this strategic mineral,” says the analysts.
Gold continues to be one of the key minerals in Zimbabwe accounting for circa 50 percent of mineral exports (employing in excess of 25 percent of formal employment and over 300 000 involved in artisanal gold mining).
