Blanket concludes indigenisation deal

HARARE - AIM-listed Caledonia Mining has completed the indigenisation of its Zimbabwe-based Blanket gold mine after securing approvals from the Reserve Bank of Zimbabwe (RBZ).

The indigenisation deal, as outlined in a February memorandum of understanding with Zimbabwe’s Indigenisation minister Saviour Kasukuwere, would see indigenous Zimbabweans acquire 51 percent of the mine for $30, 09 million.

The Canada-based Caledonia yesterday said the RBZ approval had been received and accordingly, the various agreements and related transactions had been implemented.

“We welcome our new indigenous Zimbabwean partners with whom we look forward to developing a mutually beneficial relationship,” said Caledonia president and chief executive Stefan Hayden in a statement.

In May, the southern Africa-focused miner sold a 10 percent stake to the Blanket Mine Employee Trust for $7,34 million, donated another 10 percent stake and donated a non-refundable $1 million to the Gwanda Community Share Ownership Trust.

Caledonia in June sold a 16 percent stake in the mine to Zimbabwe’s National Indigenisation and Economic Empowerment Fund for $11,74 million.

“The newly-indigenised Blanket is in a unique position amongst Zimbabwean gold miners, as Blanket has significant growth potential which can be funded from internal cash flows,” said Hayden, adding that the mine could now finalise and implement its growth and development strategy.

Caledonia is one of the several foreign-owned mining companies the government has ordered to cede majority stakes to indigenous Zimbabweans.

However, critics warn such calls are scaring away foreign investors from an industry that is in need of financial injection following years of economic turmoil.

Meanwhile, the Gwanda-based Blanket mine recorded a 12 percent increase in gold production in the third quarter of this year to 12 919 ounces from the previous quarter production of 11 560 ounces.

The latest quarter production was also 33 percent more than the 9 743 ounces produced during the same period last year.

The mine’s total gold production for the nine months to September 30, 2012 was 33 643 ounces, which is also a 33 percent increase in production compared to the first nine months of last year.

“The record gold production achieved during the quarter is the highest quarterly gold production ever achieved by the Blanket Mine since its first recorded year of production in 1906,” he said. - John Kachembere

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