Caledon Mining (CMCL LN) 428p mkt cap �45.4m – Blanket Mine continues without interruption despite Central Bank dollar shortage causing closure of gold mines
Caledonia increase stake by 15% to 64% of the Blanket Gold Mine
• Caledonia Resources report that their Blanked gold mine continues to work despite escalating a lack of foreign exchange in general in Zimbabwe.
• Last week Rio Zim announced the closure of three gold mines in Zimbabwe due to a lack of available foreign exchange from the Central Bank.
• Gold miners must sell gold through the Central Bank in Zimbabwe and get a credit from the government for exporting gold which should give the gold miners first priority on foreign exchange which comes in.
• This system has worked well in recent years with the government recognising the importance of keeping the gold mines working.
• We wonder how much foreign exchange in going out in the servicing of debt to China used to build roads and other infrastructure.
• In separate news Caledonia Mining report they have purchased a further 15% of the Blanket gold mine taking their stake to 64%.
• The purchase values the 15% stake at $16.667m implying a value for the whole mine at US$111m.
• The deal involves the cancellation of a $11.467m loan to the vendors and the issuance of 727,266 new shares at $7.15/s.
• The sellers, Fremiro will then hold 6.42% of the Blanket mine following the transaction