Caledonia Mining has entered into a legally binding sale agreement with Fremiro. The agreement reflects the terms of a MOU signed by both parties.
The conditions to completion of the purchase include, amongst other things, approvals from various Zimbabwean regulatory authorities.
As a reminder, Caledonia has agreed to purchase Fremiro’s 15% shareholding in Blanket Mine for a gross consideration of $16.667 million to be settled through the cancellation of the loan between the two entities which stood at $11.467 million as at June 30, 2018; and the issue of 727,266 new shares in Caledonia at an issue price of $7.15 per share, being the closing price on the NYSE American at August 17, 2018.
On completion of the transaction, the company will have a 64% shareholding in Blanket and Fremiro will hold 6.42% of Caledonia’s diluted equity.
The company notes recent media reports which refer to certain Zimbabwean gold miners having suspended production due to the lack of foreign exchange to purchase key inputs.
Caledonia confirms that, although the availability of foreign exchange in Zimbabwe appears to have reduced in recent weeks, production at the Blanket Mine has continued without interruption.
The monetary situation in Zimbabwe is receiving the highest levels of attention from Zimbabwean monetary and government authorities with whom the company is actively and constructively engaged on a regular and ongoing basis.