eBusiness Weekly
Oliver Kazunga
GIANT global investor, Caledonia Mining Corporation Plc, which owns Blanket Mine in Gwanda, has signed a US$53,3 million deal to buy Bilboes Gold Limited in Bubi district, Matabeleland North province.
The latest development further buttresses the mining group’s zeal to become a multi-asset gold producer in Zimbabwe and elsewhere.
Towards the end of last year, the mining group announced that it had bought the Maligreen Goldfields in Gweru in the Midlands province for about US$4 million.
In December 2020, the mining concern announced that it had bought a US$2,5 million option over a gold exploration prospect, Glen Hulme also in Gweru.
In a statement, Caledonia said Bilboes is a large, high grade gold deposit located about 75 kilometres north of Bulawayo, Zimbabwe and the project has been subject to a limited amount of open pit mining.
“Caledonia Mining Corporation Plc is pleased to announce that it has signed an agreement to purchase Bilboes Gold Limited, the parent company which owns, through its Zimbabwe subsidiary, Bilboes Holdings (Private) Limited, the Bilboes gold project in Zimbabwe for a total consideration of 5 123 044 Caledonia shares representing approximately 28,5 percent of Caledonia’s fully diluted equity, and a 1 percent net smelter royalty on the project’s revenues.
“Based on yesterday’s closing share price on the New York Stock Exchange of US$10,40 per share, the value of the new shares that will be issued as consideration is currently US$53,279,658,” it said.
The transaction is subject to several conditions including that Bilboes Holdings receives confirmation from the Zimbabwe authorities that it will, for the life of the mine, be able to export gold directly and to retain 100 percent of the sale proceeds in US dollars with no requirement to convert US dollar gold revenues into domestic currency.
Part of the condition is that an arrangement with or confirmation from the Zimbabwe authorities and/or an independent power producer regarding the future availability of a sufficiently reliable and affordable electricity supply to the project.
Commenting on the announcement, Caledonia chief executive officer Mark Learmonth said: “We are delighted to have signed an agreement for the purchase of Bilboes, the premier gold development project in Zimbabwe, and indeed one of the best gold development projects in Africa.
“This is a transformational asset for Caledonia, as we embark on the next step in our journey to become a multi-asset, mid-tier gold producer.”
He said once in full production (which will be subject to financing of the capital expenditure) Caledonia’s management believes that Bilboes could produce three times the existing 64 percent attributable share of gold production from Blanket.
This, Learmonth said, will result in
production from the enlarged Caledonia group being potentially four times its current size.
“The acquisition of Bilboes will build on the recent acquisition of the Maligreen claims which host NI 43-101 compliant inferred mineral resources of 940 000 ounces of gold in 15,6 million tonnes at a grade of 1,88g/t1.
“We continue our work at Maligreen which is focused on increasing the confidence level of the resource base.
“We have followed the progress of Bilboes for several years and today’s announcement marks the culmination of many years of hard work on the part of both the Caledonia and Bilboes management teams,” he said.
