Caledonia Mining Corporation Plc (NYSE AMERICAN: CMCL; AIM: CMCL;
VFEX: CMCL) (“Caledonia” or “the Company”) is pleased to announce
that it has signed a conditional sale agreement for the entire
issued share capital of its Zimbabwe subsidiary, Caledonia Mining
Services (Private) Limited (“CMS”), which owns and operates the
12.2MWac solar plant that supplies power to Blanket Mine. CMS is to
be sold to CrossBoundary Energy Holdings (“CBE”) for $22.35
million, payable in cash, and the power generation of the solar
plant will continue to be sold to Blanket Mine by way of a power
purchase agreement.
Highlights
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Upon completion of the sale, Caledonia will realise a profit on the
$14.3 million construction cost by selling the plant for $22.35
million.
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Completion of the sale will return capital to Caledonia at a key
moment in the Company’s growth trajectory.
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Caledonia will retain the exclusive energy off take, ensuring
approximately a fifth of Blanket Mine’s daily electricity
requirement continues to be met by renewable power.
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CBE has been invited to tender for an expansion of the solar plant
to deliver further renewable energy to Blanket Mine.
The construction of the solar plant was
initially financed by a registered offering of Caledonia’s shares
in the US in 2020 and this raised $13 million through the issue of
597,963 shares.
Since commissioning in February 2023, the solar
plant has generated over 47,350Mwh of power, and profits
attributable to the solar plant for the year ended December 31,
2023 were $728,023. The power generated from the solar plant has
significantly reduced the use of diesel generators and grid power
at Blanket Mine, ensuring approximately a fifth of the mine’s daily
electricity needs are met by solar power. The plant will continue
to supply Blanket Mine under an exclusive power purchase
agreement.
The sales consideration will be reinvested in
Caledonia's other projects that are expected to yield a higher
return to our shareholders and will have the added benefit of
focussing management's attention on our core business of gold
mining and exploration.
CrossBoundary Energy is a leading developer,
owner and operator of distributed renewable energy solutions for
businesses across Africa, providing cheaper and cleaner energy
through power purchase and lease agreements. CBE provides tailored,
fully financed renewable energy solutions to its corporate
customers allowing them to avoid upfront capital expenditure and
technical risks, whilst still benefitting from cheaper, cleaner,
and more reliable power. Through close collaboration with its
partners, CBE provides renewable energy solutions that adapt to the
needs of their clients including designing, building, financing,
and maintaining renewable energy installations.
CBE was launched by the CrossBoundary Group, a
mission-driven investment firm, in 2015 as Sub-Saharan Africa's
first provider of fully financed commercial-industrial solar
solutions. It currently operates in over fourteen African countries
and has a large portfolio of renewable energy infrastructure
projects across the continent. In addition to mining, CBE’s clients
include leading local manufacturers and multinational corporations
such as Diageo, Heineken, and Unilever. Completion of the purchase
is subject to various conditions precedent, including obtaining
local regulatory approvals and the installation of some upgraded
equipment, which are anticipated to take a few months to
satisfy.
Commenting on the announcement, Mark Learmonth, Chief
Executive Officer, said:
“We are pleased to have signed this agreement to
sell the solar plant which, upon completion, will enable us to
redeploy capital to our core business of mining.
“Whilst the sale will generate an immediate
profit for the Company, more importantly we have identified an
experienced partner in CBE which brings vast expertise in
delivering and running renewable energy projects.
“We look forward to developing a strong
relationship with CBE - we are already working with them to deliver
a meaningful extension to the plant, and we will be considering
renewable energy solutions at our other development projects in due
course.”
Matthew Tilleard, Managing Partner at
CrossBoundary Energy, said:
“CrossBoundary Energy’s mission is to provide
affordable, clean power solutions to underserved markets, and we
achieve this by deploying capital into energy projects that enable
businesses to focus on their core operations. Our partnership with
Caledonia demonstrates the efficacy of this model for the mining
sector, benefiting the mine’s operations and ultimately enabling
sustainable mining. We look forward to pursuing these acquisitions
with miners across the continent.”
Caledonia Mining Corporation PlcMark
LearmonthCamilla Horsfall |
Tel: +44 1534 679 800Tel: +44 7817 841 793 |
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Cavendish Capital
Markets Limited (Nomad and Joint Broker)Adrian Hadden
Pearl Kellie |
Tel: +44 207 397 1965Tel: +44
131 220 9775 |
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Panmure Liberum (Joint
Broker)Scott Mathieson/ Matt Hogg |
Tel: +44 20 3100 2000 |
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Camarco, Financial PR
(UK)Gordon PooleJulia TilleyElfie Kent |
Tel: +44 20 3757 4980 |
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3PPB (Financial PR,
North America)Patrick ChidleyPaul Durham |
Tel: +1 917 991 7701Tel: +1
203 940 2538 |
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Curate Public
Relations (Zimbabwe)Debra Tatenda |
Tel: +263 77802131 |
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IH Securities
(Private) Limited (VFEX Sponsor -
Zimbabwe)Lloyd Mlotshwa |
Tel: +263 (242) 745
119/33/39 |
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Note: The information contained within
this announcement is deemed by the Company to constitute inside
information under the Market Abuse Regulation (EU) No.
596/2014 (“MAR”) as it forms part
of UK domestic law by virtue of the European Union (Withdrawal) Act
2018 and is disclosed in accordance with the
Company's obligations under Article 17 of MAR.
Cautionary Note Concerning
Forward-Looking InformationInformation and statements
contained in this news release that are not historical facts are
“forward-looking information” within the meaning of applicable
securities legislation that involve risks and uncertainties
relating, but not limited, to Caledonia’s current expectations,
intentions, plans, and beliefs. Forward-looking information can
often be identified by forward-looking words such as “anticipate”,
“believe”, “expect”, “goal”, “plan”, “target”, “intend”,
“estimate”, “could”, “should”, “may” and “will” or the negative of
these terms or similar words suggesting future outcomes, or other
expectations, beliefs, plans, objectives, assumptions, intentions
or statements about future events or performance. Examples of
forward-looking information in this news release include: the
satisfaction of conditions precedent in connection with the sale
agreement and the completion of the sale, the continued supply and
sale of power under the power purchase agreement, any increase in
the size of the solar power plant and the development of new plants
at other projects. The forward-looking information contained in
this news release is based, in part, on assumptions and factors
that may change or prove to be incorrect, thus causing actual
results, performance or achievements to be materially different
from those expressed or implied by forward-looking information.
Such factors and assumptions include, but are not limited to: the
establishment of estimated resources and reserves, the grade and
recovery of minerals which are mined varying from estimates,
success of future exploration and drilling programs, reliability of
drilling, sampling and assay data, the representativeness of
mineralization being accurate, success of planned metallurgical
test-work, capital availability and accuracy of estimated operating
costs, obtaining required governmental, environmental or other
project approvals, inflation, changes in exchange rates,
fluctuations in commodity prices, delays in the development of
projects, the assessment of the existing capital intensity of the
Bilboes gold project and Caledonia’s experience of project
development in Zimbabwe and other factors.
Security holders, potential security holders and
other prospective investors should be aware that these statements
are subject to known and unknown risks, uncertainties and other
factors that could cause actual results to differ materially from
those suggested by the forward-looking statements. Such factors
include, but are not limited to: risks relating to the completion
of the sale, risks relating to estimates of mineral reserves and
mineral resources proving to be inaccurate, fluctuations in gold
price, risks and hazards associated with the business of mineral
exploration, development and mining, risks relating to the credit
worthiness or financial condition of suppliers, refiners and other
parties with whom the Company does business; inadequate insurance,
or inability to obtain insurance, to cover these risks and hazards,
employee relations; relationships with and claims by local
communities and indigenous populations; political risk; risks
related to natural disasters, terrorism, civil unrest, public
health concerns (including health epidemics or outbreaks of
communicable diseases such as the coronavirus (COVID-19));
availability and increasing costs associated with mining inputs and
labour; the speculative nature of mineral exploration and
development, including the risks of obtaining or maintaining
necessary licenses and permits, diminishing quantities or grades of
mineral reserves as mining occurs; global financial condition, the
actual results of current exploration activities, changes to
conclusions of economic evaluations, and changes in project
parameters to deal with unanticipated economic or other factors,
risks of increased capital and operating costs, environmental,
safety or regulatory risks, expropriation, the Company’s title to
properties including ownership thereof, increased competition in
the mining industry for properties, equipment, qualified personnel
and their costs, risks relating to the uncertainty of timing of
events including targeted production rate increase and currency
fluctuations. Security holders, potential security holders and
other prospective investors are cautioned not to place undue
reliance on forward-looking information. By its nature,
forward-looking information involves numerous assumptions, inherent
risks and uncertainties, both general and specific, that contribute
to the possibility that the predictions, forecasts, projections and
various future events will not occur. Caledonia undertakes no
obligation to update publicly or otherwise revise any
forward-looking information whether as a result of new information,
future events or other such factors which affect this information,
except as required by law.
This news release is not an offer of the shares
of Caledonia for sale in the United States or elsewhere. This news
release shall not constitute an offer to sell or the solicitation
of an offer to buy, nor shall there be any sale of the shares of
Caledonia, in any province, state or jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of such province, state
or jurisdiction.
Caledonia Mining (AMEX:CMCL)
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