THE world’s largest asset manager, Blackrock Inc has increased its shareholding in Caledonia Mining Corporation by 1,36% after investing US$3,21 million in the gold miner over the last six months, businessdigest can report.
Last year, the Victoria Falls Stock Exchange-listed Caledonia made several announcements of Blackrock’s increases in shareholding, leading to a current stake of 4,84% from 3,48% on August 29, 2023.
In the third quarter of 2023, Blackrock, which is a United States-based firm, had assets under management valued at US$9,1 trillion.
Its shareholding in Caledonia is through the miner’s primary listing on the New York Stock Exchange.
When reached for comment, Blackrock declined to respond to the paper on its future shareholding plans into Caledonia.
However, a source in the firm who requested for anonymity, told businessdigest that an investment in any firm using its assets was in no way a vote of confidence.
“For your background, the vast majority of our equity holdings on behalf of clients are in index strategies, like ETFs (exchange traded funds), which track third party indexes,” the source said.
“Our holdings through these strategies are not the result of active investment/stockpicking, nor do they necessarily reflect a particular view about a company or sector. These funds track third party indexes, like the Russell 2000, so investments by those funds do not reflect active stockpicking or a particular view about a company or sector.”
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Caledonia, which controls Blanket Mine, Bilboes and Motapa, had a market cap of US$217,28 million on the NYSE as of Wednesday.
Blackrock’s shareholding increase into Caledonia comes despite the miner experiencing a 95% drop in profit after tax to US$1,69 million in the nine months ended September 30, 2023, compared to the 2022 similar period.
In its production update released on January 12, Caledonia announced that it had set aside US$34,4 million as its capex for 2024 to scale up production of its mines.
Last year, the miner produced 75 416 gold ounces and has a target of between 74 000 and 78 000 ounces for 2024 assuming its Blanket Mine maintains the production rate achieved in 2023.
This, the miner reported, reflects the prudent decision to suspend mining in lower margin areas which include lower grades and volumes, and higher costs.
Caledonia, however, warned investors that these plans would be dependent on the successful implementation of mine plans as well as other factors.
The mining giant said any financial outlook or future oriented financial information, any such statement was made as of the date hereof and included herein to provide prospective investors with an understanding of the company's plans and assumptions.
“Security holders, potential security holders and other prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements,” it added.
Such factors include risks relating to estimates of mineral reserves and mineral resources proving to be inaccurate, fluctuations in gold price, risks and hazards associated with the business of mineral exploration, development and mining.
Other risks include credit worthiness or financial condition of suppliers, refiners and other parties with whom the company does business, inadequate insurance, political risk, climate change, and the availability and increasing costs associated with mining inputs and labour.
Caledonia also reminded investors of the speculative nature of mineral exploration and development, including the risks of obtaining or maintaining necessary licenses and permits, diminishing quantities or grades of mineral reserves as mining occurs.
Lastly, the firm cited the global financial condition as well as economic shocks from both foreign and domestic policies.
"Other major Caledonia shareholders include American firms Van Eck Associates Corporation (asset manager), State Street Corporation (financial services firm), Geode Capital Management, LLC (investment manager), and Goehring & Rozencwajg Associates, LLC (investment services firm).
Others are Dimensional Fund Advisors LP (investment firm), Northern Trust Corporation (financial services firm), Bridgeway Capital Management, Inc. (asset manager), Vanguard Group Inc (world's second-largest asset manager with funds under management of US$7,2 trillion), and Bank of America Corporation (bank)."
