Director to earn US$470 000 annual salary after gold mine take over

24 Jul, 2022 - 00:07 0 Views
Director to earn US$470 000 annual salary after gold mine take over Victor Gapare

The Sunday News

Judith Phiri, Business Reporter  
VICTORIA Falls Stock Exchange (VFEX) listed resources group, Caledonia Mining Corporation, which owns Blanket Mine in Gwanda, has signed a US$53.2 million agreement to buy Bilboes gold project.

Caledonia Mining Corporation

Bilboes is 75 kilometers north of Bulawayo.

In a statement last week announcing the transaction, Caledonia Mining Corporation said:

“The Company 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 per cent of Caledonia’s fully diluted equity, and a 1 per cent net smelter royalty (“NSR”) on the Project’s revenues (the “Transaction”).”

The company said based on Wednesday closing share price on New York Stock Exchange American of US$10.40 per share, the value of the new shares that will be issued as consideration is currently US$53,279,658.

Caledonia Mining said completion of the transaction will be subject to several conditions set out such as part of the deal, Bilboes chief executive officer (CEO) Mr Victor Gapare will join Caledonia as a director on a US$470 000 annual salary (before incentives).

Bilboes is a high-grade gold deposit previously owned by Anglo American and Caledonia has set conditions before the deal is finalised that the Government must allow the company to export gold directly and to retain 100 percent of sale proceeds in US$ and no requirement to convert revenues into ZW$.

The company said also 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.

Part of the statement read: “Caledonia will conduct its own feasibility study to identify the most judicious way to commercialise the project to optimize shareholder returns.

One approach that will be considered is a phased development which would minimise the initial capital investment and reduce the need for third party funding.”

The company said prior to completion of the transaction, Caledonia will enter a tribute arrangement with Bilboes Holdings so that oxide operations can be re-started with the expectation that Bilboes Holdings will return to profitable operations within 6 months.

Caledonia said this also has the benefit of an element of pre-stripping for the main development of the project.

Commenting on the announcement, Caledonia Mining CEO, Mr 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.”

Mr Mark Learmonth

He said this was a transformational asset for Caledonia, as they embark on the next step in our journey to become a multi-asset, mid-tier gold producer.

Mr Learmonth said once in full production (which will be subject to financing of the capex) Caledonia’s management believes that Bilboes could produce three times their current 64 per cent attributable share of gold production from Blanket, resulting 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 NI43-101 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,” he said.

Mr Learmonth said they have followed the progress of Bilboes for several years and their announcement marks the culmination of many years of hard work on the part of both the Caledonia and Bilboes management teams.

“The proposed acquisition of Bilboes is well timed following the completion of the Central Shaft project at Blanket in 2021 as we look to reinvest some of our surplus cash flow in this exciting new growth opportunity.

“I look forward to updating shareholders as we review the investment plan for Bilboes and as we continue work at Maligreen.”

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