Caledonia inks exploration rights deal
Caledonia Mining Corporation — Blanket Mine’s parent company — has entered into another option agreement which will give the company exclusive exploration rights and claims at Connemara North in the Midlands Province.
This is further to another option agreement it entered into early this month over Glen Hume which is also in the Midlands area.
In a statement, Caedonia indicated that the latest option agreement gives them the exclusive right to explore and subsequently, if exploration is successful and at its sole discretion, acquire the mining claims over an area known as Connemara North, a property also situated in the Midlands area.
Connemara North is the northern section of the currently closed Connemara Mine which was previously owned by First Quantum Minerals and was placed on care and maintenance in 2001 and subsequently disposed of in 2003.
According to the announcement, the latest option gives Caledonia the right to explore the area for a period of up to 18 months and subsequently, if exploration is successful and at its sole discretion, to acquire the mining claims over the area.
The total consideration is an initial payment of US$300 000, followed by a further payment of US$5 million (payable in cash or shares at the discretion of the vendor) which would be payable should Caledonia decide to exercise its right to acquire the mining claims.
Caledonia has agreed to the payment of a 1 percent net smelter royalty to the vendor on gold it produces from Connemara North.
Caledonia chief executive officer Steve Curtis, said there was great potential on this property which previously had an annual gold production of 20 000.
“We are pleased to enter into this option agreement which gives us the right to explore and subsequently to acquire mining claims over the Connemara North property, part of a wider area that contained a previously operational mine which shows great potential and has been lying untapped for 20 years.
“Connemara North is also in close proximity to the Glen Hume property over which we have already acquired an option.
“We are excited at the prospect of these two properties and if evaluation work proves successful and our exploration programmes deliver favourable results, Caledonia will have a great opportunity to establish a footprint in the highly prospective Zimbabwe Midlands which could deliver operating synergies between the two.”
Connemara Mine has not been commercially mined since it was placed under cafe and maintenance.
Prior to that, the mine produced approximately 20 000 ounces of gold per annum from an open pit heap leach operation.
Previous public disclosures made by First Quantum in 2001 indicated that they had plans to expand the existing open pit operations at Connemara mine, when gold prices were approximately $300 per ounce.
The Connemara
North property is approximately 30 kilometres from Glen Hume with good road access between them offering the potential of operating synergies should Caledonia decide to develop both areas.-herald.cl.zw
