Caledonia gives 51% of Blanket to indigenous Zimbabweans
Caledonia Mining announced on Monday it has signed a deal with the Zimbabwe government to sell 51% of its Blanket Mine indigenous Zimbabweans for $30 million.
The Toronto-based company said in a statement it will facilitate the vendor funding of these transactions which will be repaid by way of future dividends from Blanket.
Blanket's unaudited revenues and profit after tax for the year to December 31, 2011 were $56.6 million and $19.2 million respectively.
The Government of Zimbabwe has agreed that implementation of the terms of the MoU will constitute full compliance by Blanket and Caledonia with the requirements of the Indigenisation Act according to the press release.
The transaction was concluded with the Minister of Youth, Development, Indigenisation and Empowerment of the Government of Zimbabwe on the following basis:
- 16% will be sold to the National Indigenisation and Economic Empowerment Fund;
- 10% will be sold to a Management and Employee Trust for the benefit of the present and future managers and employees of Blanket;
- 15% will be sold to identified Indigenous Zimbabweans; and
- 10% will be donated to the Blanket Gwanda Community Trust. Caledonia will also make a non-refundable donation of US$1.0 million to the Trust as soon as it has been established.
Stefan Hayden, Caledonia's President and Chief Executive officer said:
"I am pleased we have signed a MoU which, when fully implemented, will represent the conclusion of the indigenisation requirements for Blanket. The transaction will be concluded for a value which is close to Caledonia's current market capitalisation. This is a significant achievement in the current environment and the transaction is neither an expropriation nor a partial nationalisation.
"Excellent progress has been made at Blanket in recent years: gold production has increased by over 300% from 3,148oz in the first quarter of 2010 to 10,533oz in the fourth quarter of 2011 and cash operating costs fell by 27% from$804/oz in the first quarter of 2010 to $583/oz in the third quarter of 2011.
"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."