eBusiness Weekly
Michael Tome
CALEDONIA Mining Corporation says it will deploy supplementary cash into its exploration and project development portfolio in Zimbabwe as it grows its footprint to become a mid-tier gold producer in the country.
The Jersey-based mining concern, indicated it would be funding the tasks through proceeds from the industrious Blanket Mine operations.
Caledonia has steadily been expanding its trail in Zimbabwe and just in November this year, acquired Motapa Mining, formerly owned by Bulawayo Mining Co. Ltd, a privately owned UK company before its departure from the Zimbabwean gold sector in the late 1990s.
Motapa gold claims, spanning approximately 2 200 hectares are located next to Bilboes Mine, and according to Caledonia, it is conveniently important and carries high potential in the company’s endeavour to become a flagship mining concern in the country.
The transaction is the latest in the company’s deliberate intention to branch out the firm’s production base, which is currently centered on Blanket Mine operations as it has been expanded to produce 80,000 ounces of gold annually starting this year.
Mid-July 2022, the company penned a US$53, 3 million deal with Bilboes Gold Limited in the Matabeleland province after the gold miner acquired Maligreen Goldfields in Gweru a year ago for US$4 million, where it indicated it would spend US$1, 6 million in exploring the brownfields prospect for the next two years.
Moreover, in December 2020, Caledonia announced the procurement of a US$2, 5 million gold exploration prospect Glen Hulme, which is also located in Gweru.
“With the central shaft at Blanket now fully operational and production targeting 80 000 ounces of gold per year, we anticipate that we will deploy the incremental cash flow arising from Blanket into our exciting exploration and project development portfolio in Zimbabwe,” said Mark Learmonth, Caledonia Chief Executive Officer in his remarks on the acquisition of Motapa.
However, on the Bilboes business deal, the consortium sought an agreement with the Zimbabwean authorities, allowing Bilboes Holdings to ship gold directly and to retain 100 percent of the sale proceeds in US dollars during the life of the mine.
Further seeking the acquired entity (Bilboes Holdings) to be allowed not to convert the US dollar revenues from gold into domestic currency.
The other condition of the agreement implored the Zimbabwean authorities to ascertain the future obtainability of electricity supply to the Bilboes mining and processing operations at a competitive price.
Learmonth is on record saying his entity is very interested in prospecting in Zimbabwe as Caledonia continues to evaluate investment projects in Zimbabwe.
“Zimbabwe is a highly prospective gold destination and we are very keen to get hands on more assets in the country. Zimbabwe to date is the third largest gold producing entity in Africa after Angola and South Africa, thus it is the last real big frontier for gold prospecting activity.”
He said the entity was even making deliberate attempts to sensitise its international shareholders to invest more money for growth.
Blanket Mine, Caledonia’s core mining operation this year Caledonia commissioned its central shaft and expects its production to hit 80 000 ounces this year, which is a first time record from 67 000 ounces last year.
