Caledonia to help in Blanket indigenisation

shareholding they would have acquired in the local mining entity. The dividends due will instead be used to repay the US$30 million that would be used to buy the stake.
This follows the signing on Monday of a Memorandum of Understanding between the Government and the Canadian mining firm.
Caledonia has agreed to sell 51 percent of Blanket Mine at a transaction value of US$30 million in line with indigenisation requirements.
The National Indigenisation and Economic Empowerment Fund will thus receive 16 percent, management and employees 15 percent, Gwanda community 10 percent and other locals 15 percent.
Foreign-owned companies are required in terms of the Indigenisation and Economic Empowerment Act to sell at least 51 percent shareholding to indigenous black Zimbabweans.
The Toronto Stock Exchange-listed firm said the company would facilitate vendor funding for the completion of the deal.
“Caledonia will facilitate vendor funding of these transactions, which would be repaid by way of future dividends from Blanket Mine,” said Caledonia.
“Caledonia expects to redeploy the sale consideration (US$30 million) in its projects.”
The Canadian firm undertook to complete the implementation of all components of the indigenisation required sooner than later.
Caledonia said the Government had agreed that the implementation terms of the MoU constituted full indigenisation. The firm once ran into problems with Government following allegations that the firm labelled indigenisation “a political gimmick”.
President and chief executive Mr Stefan Hayden said the transaction was an achievement and was neither expropriation nor nationalisation.
“I am pleased to say 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,” he said.
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.
Gold output at Blanket has increased by over 300 percent from 3 148 ounces in the first quarter of 2010 to
10 533 ounces in the fourth quarter of 2011.
Cash operating costs fell by 27 percent from US$804 per ounce in the first quarter of 2010 to US$583 per ounce in the third quarter of 2011.
High-profile companies that have already taken measures to comply with indigenisation requirements include Zimplats, Mimosa and Murowa Diamonds, among a host of others in the mining business.