Caledonia to raise US$10 million for expansion
Caledonia Mining Corporation Plc, parent company for Blanket Mine, is proposing to raise approximately £8,1 million (US$10 million) through placing of new common shares of no par value at a price per placing share of £11,15 (approximately US$13,74).
The placing is being conducted in the UK and South Africa through an accelerated bookbuilding process, which is being managed by Cenkos Securities plc, Liberum Capital Limited, and The Standard Bank of South Africa Limited.
In addition to the placing, IH Securities (Private) Limited is undertaking, on behalf of the company, a placing in Zimbabwe of Zimbabwe Depositary Receipts (ZDRs) to raise approximately £2,4 million which is approximately US$3 million at the placing price.
According to the mining firm, application will be made to the Victoria Falls Stock Exchange (VFEX) for the ZDRs to be admitted to trading, expected to commence no later than 7th April 2023.
“The ZDRs will be issued and credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after the admission of those ZDRs and will otherwise rank on VFEX Admission pari passu in all respects with each other and with the existing common shares (or depositary interests as applicable) in the company.
“IH Securities and the Company reserve the right to accept over-subscriptions for ZDRs and to determine the maximum number of ZDRs that will be issued in the Zimbabwe Placing. The ZDRs have not been made available to the public and have not been offered or sold in any jurisdiction where it would be unlawful to do so,” said the group.
According to Caledonia, the net proceeds of the fundraise, together with the company’s existing cash reserves and the future cash to be generated from its ownership of the producing and cash-generative Blanket Mine and from the Bilboes oxide operation, will strengthen the company’s balance sheet and provide the company with working capital flexibility to accelerate planned work at the three new gold projects it is currently undertaking in the country.
Approximately US$2 million of the net proceeds of the fundraise are anticipated to be used to fund a new feasibility study to investigate commercialisation of Bilboes, possibly through a phased development approach.
A further US$2 million is expected to be used for the procurement of a management facility at Bulawayo, which will be used to provide shared services for Blanket Mine and also for the projects at both Bilboes and Motapa.
The company plans to use approximately US$6 million of the net proceeds to fund further exploration of the Motapa gold exploration project, which was acquired in November 2022 for US$8,25 million in cash and loan notes.
The remaining funds are expected to be used for general working capital purposes.-ebusinessweekly
