Under the agreement, 16% will be sold to the National Indigenisation and Economic Empowerment Fund, 10% will be taken up by management and employees, and 10% will be donated to the Blanket Gwanda Community Trust. In addition, the group will donate US$1 million to the trust after it has been set up. The 15% remainder will be sold to unnamed private investors who were identified on the basis of being able to add value to operations.
Caledonia will facilitate the vendor funding of these transactions which will be repaid by way of future dividends from Blanket. Caledonia expects to redeploy the sale consideration in its projects.
Chief executive Stefan Hayden, Caledonia’s president and chief executive officer said: “We are pleased to have signed a Memorandum of Understanding which, when fully implemented, will represent the conclusion of the indigenisation requirements for Blanket. This is a significant achievement in the current environment and the transaction is neither an expropriation nor a partial nationalisation.”
Hayden said the group had been able to draw the line on the indigenisation issue and had agreed to bring in new partners to the mine. He however added that the outcome would not affect the company’s exploration programmes.
Hayden said the mine had moved production 102% higher last year and performance had been positive in the last eight consecutive quarters. Gold production had increased by more than 300% from 3 148oz in the first quarter of 2010 to 10 533oz in the fourth quarter of 2011. Cash operating costs fell by 27% from US$804/oz in the first quarter of 2010 to US$583/oz in the third quarter of 2011.
Blanket’s revenues and profit after tax for the year to December 31, 2011 were US$56,6 million and US$19,2 million respectively.
“I hope that Blanket and Caledonia can now build on this track record of success. The indigenisation agreement, when fully implemented, will introduce new shareholders to Blanket and I am confident that their participation will enhance Blanket’s further growth and development.
“We look forward to working with our new shareholders in further progressing operations at Blanket for the benefit of all stakeholders,” Hayden said.
Caledonia is an African focused mining and exploration company with an operating gold mine (Blanket) in Zimbabwe, two platinum-nickel exploration projects in South Africa and a cobalt-copper exploration project in Zambia amongst its exploration portfolio in South Africa, Zimbabwe and Zambia.