eBusiness Weekly
Business Writer
Victoria Falls Stock Exchange (VFEX) listed resources group – Caledonia Mining Corporation Plc – on Friday completed the acquisition of Bilboes Gold Limited for 1,5 million shares.
This comes after meeting regulatory requirements, in a transaction completed by specialist fund manager, Baker Steel Resources Trust Limited.
The Jersey based gold producers with operations in Zimbabwe – Blanket Mine – acquired the company which owns the Bilboes gold project in Zimbabwe.
Bilboes is a large high grade gold deposit located about 75km North of Bulawayo.
The acquisition of Bilboes also comes as the group is scouting for more investment opportunities in Zimbabwe as it pushes to become a multi-asset gold producer.
Caledonia says the 1,5 million shares represents approximately 28,5 percent of Caledonia’s fully diluted share capital and a 1 percent net smelter royalty (NSR) on the project’s revenues.
Once the full production rate is achieved, the NSR will generate about US$2,6 million per annum for the group based on current prices of gold.
The group added that the maximum number of new shares that could be issued as consideration could be US$65,6 million, based on Friday’s trading on the New York Stock Exchange at US$12,82 per share.
“Completion of the transaction is the cornerstone in Caledonia’s strategy to create a mid-tier, multi-asset gold producer focused on Zimbabwe. Bilboes is a large, high-grade sulphide deposit, which is amenable to low-cost, open-pit operations,” said Caledonia chief executive officer, Mark Learmonth.
A feasibility study on the Bilboes project, which has been prepared by the Bilboes vendors, envisages production of approximately 168,000 ounces of gold per annum over a 10-year life.
But Caledonia will commission its own feasibility study to identify the most
appropriate way to commercialise this asset having regard to the availability of funding with the objective of maximising Caledonia’s net present value per share.
“I anticipate the feasibility study will take 12 to 14 months to complete,” said Learmonth.
Historically, Bilboes has been subject to a limited amount of open pit mining.
The Project has NI43-101 compliant proven and probable mineral reserves of 1,96 million ounces of gold in 26,64 million tonnes at a grade of 2,29 g/t and measured and indicated mineral resources of 2,56 million ounces of gold in 35,18 million tonnes at a grade of 2,26 g/t and inferred mineral resources of 577,000 ounces of gold in 9,48 million tonnes at a grade of 1,89 g/t1
According to the group, the project has produced approximately 288,000 ounces of gold since 1989.
Caledonia expects ore production from the Bilboes oxides to commence in early February and anticipates to recover gold from the heap leach from March.
The acquisition of Bilboes comes after the implementation of the Central Shaft project at Blanket Mine, which is now producing at its target production rate of 80,000 ounces per annum. This is in addition to the acquisitions of the exploration projects at Maligeen and Motapa.
“We recently announced an upgrade to the existing mineral resource base at Maligreen. Motapa is at a much earlier stage but, given its large size, its attractive geological prospectivity and its contiguity with Bilboes we believe it is a highly attractive addition to our portfolio,” said Learmonth.
