eBusiness Weekly
Enacy Mapakame
Caledonia Mining Corporation Plc’s proposed Victoria Falls Exchange (VFEX) listing gathers momentum following approvals from the bourse in a move that will allow the resources group to raise capital for further expansion projects in Zimbabwe.
In a prelisting statement, the resources group-parent company for gold producer Blanket Mine — said the proposed listing will allow the group to access investors in Zimbabwe thus creating local shareholder spread and liquidity among other benefits.
“The proposed listing is expected to enable the group to benefit from incentives announced by the Minister of Finance and Economic Development Professor Mthuli Ncube on 10 May 2021, with it being understood that, with a VFEX listing of ZDRs (Zimbabwean Depository Receipt), members within the group should be entitled to 100 percent US$ retention of revenue earned on incremental exports.
“Allowing Caledonia to hold capital raised through the VFEX in approved local or offshore accounts with an internationally recognised banking institution, capital raised would assist the Company in funding future expansions, such as financing Caledonia’s proposed purchase of the Maligreen Project claims, situated in Gweru, Zimbabwe,” said the group.
According to the group, the listing on the US$ denominated VFEX, will also enable Blanket employees who hold long term incentive plan awards to opt for ZDRs rather than cash upon vesting to allow them to receive a dividend paying investment referenced to an offshore share price.
“This is anticipated to have a positive effect on morale and enhance long-term goal congruence between senior employees at Blanket and Caledonia,” said Caledonia.
However, in the event that the proposed listing does not take place the outlined benefits are not likely to be available to the company or the ZDR holders.
Caledonia Mining Corporation Plc is a public company that was incorporated (by way of continuance from Canada) in Jersey, Channel Islands on March 19, 2016.
The resources group is a highly profitable cash generative gold producer with a strong growth profile and is currently focused on Zimbabwe with its primary asset being a 64 percent interest in Blanket Mine.
In 2020, the Gwanda based Blanket Mine produced 57 899 ounces of gold and is on target to produce between 65 000 and 67 000 ounces of gold in 2021, having produced 48 872 ounces of gold in the first nine months of 2021.
Blanket started production in 1904 and gold production reached a level of approximately 3 500 ounces per month during the tailings treatment years from 1995 to 2007. To date more than one million ounces of gold have been produced from the property.
In terms of financial performance, Caledonia’s consolidated revenue in 2020 was approximately US$100 million, and approximately US$56 million in the first 6 months of 2021, and it held cash of US$16,7 million as at half year to June 30, 2021.
