CALEDONIA Mining Corporation says it plans to channel proceeds from its Victoria Falls Stock Exchange (VFEX) listing towards the purchase of Maligreen, a gold asset located in the Midlands province.
The Maligreen, which was announced in September 2021, was an important step in the Jersey-headquartered giant’s ambition to transform into a multi-asset operation in Zimbabwe, where it already operates Blanket gold mine near Gwanda.
Caledonia raised US$7,83 million when it listed on VFEX in December.
The war chest is enough to fund the asset that it took over in a US$4 million deal.
But outside the VFEX proceeds, the aggressively expanding gold miner has enough capacity to settle the transaction, having ended the past financial year with US$30 million cash in its vaults.
The Maligreen payment plan is contained in a Caledonia management analysis obtained by NewsDay Business.
“To accompany this listing, depositary receipts representing 619 783 shares in the company to a value of US$7,83 million were issued to create the necessary shareholder spread,” the paper said.
“The proceeds of the placing will be used to defray the purchase consideration for the Maligreen mining claims,” it added.
In September last year, Caledonia announced that it had entered into an agreement to take over Maligreen from Pan African Mining (PAM) Limited.
PAM is a privately-owned Zimbabwean company, which agreed to sell the asset for US$4 million.
Transfer of the claim to Caledonia and payment of the purchase price was completed during the fourth quarter of last year, the company said.
Maligreen, according to Caledonia, is a substantial brownfield exploration opportunity with significant historical exploration and evaluation work having been conducted on the property over the last 30 years including an estimated 60 000 meters of diamond core and percussion drilling, 3,5 tonnes of bulk metallurgical test work and aeromagnetic and ground geophysical surveys.
The total land area of Maligreen is approximately 550 hectares comprising two historic open pit mining operations which produced approximately 20 000oz of gold mined from oxides between 2000 and 2002 after which the operation was closed.
Caledonia expects to drill an initial 4 800 meters at an estimated cost of US$1,6 million over a period of 18 to 24 months to improve its understanding of the existing resource and assess the potential for a mining operation.
“Further exploration opportunities exist within the claims area and a subsequent exploration programme is under consideration to explore for continuations of the existing inferred mineral resource at depth to the north-west and the strike extension in the northern part of the property,” the company said.
“Activities in the quarter have focussed on re-evaluating data from previous exploration with the objective of upgrading the confidence level of the resource in the second quarter of 2022. Thereafter, it is expected that on-the-ground exploration activities will commence.” – (Newsday)