aurora
Business Writer
Resource exploiting giant, Caledonia Mining Corporation, has announced it is commencing the process of listing on the newly established Victoria Falls Stock Exchange (VFEX).
Such a listing would be conditional upon market conditions and the implementation of positive proposals made by the Zimbabwean authorities in respect of improved payments in US dollars for gold produced at the company’s majority owned Blanket Mine, the company said in a statement yesterday.
The VFEX is a subsidiary of the Zimbabwe Stock Exchange and was established in 2020 with the objective of kick-starting the Offshore Financial Services Centre, which has been earmarked for the special economic zone established at Victoria Falls.
The VFEX will be for foreign as well as domestic investors in Zimbabwe, and all transactions will be denominated in US dollars.
“The proposed VFEX listing demonstrates Caledonia’s continued commitment to Zimbabwe and would allow Caledonia’s and Blanket’s employees in Zimbabwe to participate more easily as Caledonia shareholders,” said the company.
Securing the VFEX listing is expected to take place during the course of 2021 and would be affected by a placing in Zimbabwe of depositary receipts to raise approximately US$3 million (to satisfy the requirements for local shareholder spread) and a subsequent introduction.
A depositary receipt is a negotiable certificate issued by an entity representing shares in a foreign company traded on a local stock exchange.
The proceeds of the placing would be used for general corporate purposes. The VFEX listing will be conditional on general market appetite and confirmation that the necessary mechanisms have been implemented so that Caledonia can realise the benefits arising from the VFEX listing.
Caledonia has engaged IH Advisory, a Harare-based financial services group as the advisor.
Chief executive Steve Curtis said in a statement: “I welcome the step towards a more liberal financial environment which is embodied in the proposed benefits attaching to a listing on the Victoria Falls Stock Exchange.”
Caledonia’s Blanket Mine realised a record production of 16 710 ounces of gold during the second quarter ended June 31, an increase of approximately 23,8 percent on the 13 499 ounces produced in the corresponding quarter of 2020.
Gold produced for the first half of 2021 was 29 907 ounces, about 7,8 percent above the 27 732 ounces produced in the first half of 2020.
Caledonia had maintained its 2021 full year production guidance of 61 000 to 67 000 ounces and remains on track to hit target of 80 000 ounces from 2022.
Bongani Ndlovu