MoU re Indigenisation of the Blanket Mine (7560X)
21 February 2012 - 3:23AM
UK Regulatory
TIDMCMCL
RNS Number : 7560X
Caledonia Mining Corporation
20 February 2012
Caledonia signs Memorandum of Understanding with the Government
of Zimbabwe relating to the Indigenisation of the Blanket Mine
Toronto, Ontario - February 20, 2012: Caledonia Mining
Corporation ("Caledonia") (TSX: CAL, NASDAQ-OTCQX: CALVF, AIM:
CMCL) announces it has signed a Memorandum of Understanding ("MoU")
with the Minister of Youth, Development, Indigenisation and
Empowerment of the Government of Zimbabwe (the "Government of
Zimbabwe") pursuant to which Caledonia has agreed to sell 51% of
the Blanket Mine in Zimbabwe ("Blanket") to Indigenous Zimbabweans
for a paid transactional value of US$30.09 million on the following
basis:
-- 16% will be sold to the National Indigenisation and Economic Empowerment Fund;
-- 10% will be sold to a Management and Employee Trust for the
benefit of the present and future managers and employees of
Blanket;
-- 15% will be sold to identified Indigenous Zimbabweans; and
-- 10% will be donated to the Blanket Gwanda Community Trust.
Caledonia will also make a non-refundable donation of US$1.0
million to the Trust as soon as it has been established.
Caledonia will facilitate the vendor funding of these
transactions which will be repaid by way of future dividends from
Blanket. Caledonia expects to redeploy the sale consideration in
its projects.
Caledonia has undertaken to complete the implementation of all
the components of the indigenisation transaction as soon as
possible. The Government of Zimbabwe has agreed that implementation
of the terms of the MoU will constitute full compliance by Blanket
and Caledonia with the requirements of the Indigenisation Act.
Further details of the MoU are subject to a confidentiality
agreement, and further announcements will be made when
appropriate.
Blanket's unaudited revenues and profit after tax for the year
to December 31, 2011 were US$56.6 million and US$19.2 million
respectively.
Mr Stefan Hayden, Caledonia's President and Chief Executive
Officer, said: "I am pleased we have signed a MoU which, when fully
implemented, will represent the conclusion of the indigenisation
requirements for Blanket. The transaction will be concluded for a
value which is close to Caledonia's current market capitalisation.
This is a significant achievement in the current environment and
the transaction is neither an expropriation nor a partial
nationalisation.
Excellent progress has been made at Blanket in recent years:
gold production has increased by over 300% from 3,148oz in the
first quarter of 2010 to 10,533oz in the fourth quarter of 2011 and
cash operating costs fell by 27% from $804/oz in the first quarter
of 2010 to $583/oz in the third quarter of 2011.
I hope that Blanket and Caledonia can now build on this track
record of success. The indigenisation agreement, when fully
implemented, will introduce new shareholders to Blanket and I am
confident that their participation will enhance Blanket's further
growth and development. We look forward to working with our new
shareholders in further progressing operations at Blanket for the
benefit of all stakeholders."
Caledonia Mining Corporation Collins Stewart Europe Limited
Mark Learmonth John Prior / Sebastian Jones
Tel: + 27 11 447 2499 Tel: + 44 20 7523 8350
marklearmonth@caledoniamining.com
Renmark Financial Communications Collins Stewart LLC
Inc
John Boidman or Nadia Marks Dan Mintz
Tel: +1 514 939 3989 or +1 416 644 Tel: +1 212 389 8022 DMintz@collinsstewartllc.com
2020
jboidman@renmarkfinancial.com
nmarks@renmarkfinancial.com
Newgate Threadneedle Communications
Laurence Read, tel +44 207 653 9855
Beth Harris, tel +44 207 653 9853
Terry Garrett, tel +44 207 653 9845
Further information regarding Caledonia's exploration activities
and operations along with its latest financials and Management
Discussion and Analysis may be found at www.caledoniamining.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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