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Caledonia secures major stake in Blanket Mine

 By Business Reporter – Tuesday 21 January 2020

HARARE (Mining Index) – CALEDONIA Mining Corporation has concluded the purchase of Fremiro’s 15 percent shareholding, bringing its shareholding in Blanket Mine to 64 percent.

“Today’s announcement marks the completion of the transaction first announced on November 6, 2018, following receipt of approvals from various Zimbabwean regulatory authorities,” said Caledonia in a statement.

Fremiro will now hold approximately 6.3 percent of Caledonia’s enlarged issued share capital.

On November 6, 2018, Caledonia announced it had entered into a legally binding agreement with Fremiro Investments to purchase Fremiro’s 15 per cent shareholding in Blanket.

Completion of the purchase required approvals from various Zimbabwean regulatory authorities, all of which have now been received.

Gross consideration for Fremiro’s shareholding in Blanket is $16.667 million which has been settled through the cancellation of the loan between Fremiro and the Company which stood at $11.467 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 NYSE American at August 17, 2018.

Commenting on the transaction, Steve Curtis, Chief Executive Officer, said:

“I am pleased to report that the Company has concluded its transaction with Fremiro to increase Caledonia’s shareholding in Blanket to 64 per cent. 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.”

Fremiro acquired its shareholding in Blanket when Caledonia implemented transactions in 2012 to comply with the Zimbabwean Indigenisation and Economic Empowerment Act.

As part of the transactions, Caledonia sold 41 per cent of Blanket to various indigenous Zimbabwean shareholders.

15 percent went to Fremiro, 16 percent to the National Indigenisation and Economic Empowerment Fund while 10 percent went to Blanket Employee Trust Services (Private) Limited.

The financing of these acquisitions was facilitated through approximately $30 million of facilitation loans to the above parties apportioned pro rata between the parties based on shareholding.

In addition, 10 per cent of Blanket was donated to the local community in the form of the Gwanda Community Share Ownership Trust.

In March 2018 the Act was amended to remove the 51 per cent indigenisation requirement for gold mining businesses; shortly thereafter, Caledonia and Fremiro agreed a transaction whereby Caledonia would purchase Fremiro’s shareholding in Blanket. ENDS// www.miningidex.co.zw

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