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CALEDONIA Mining Corporation, the parent company of Blanket Mine, is set to issue more shares in respect of its VFEX listing in order to raise more funds than originally anticipated following an “extremely positive” Zimbabwe investor response.
The VFEX is a subsidiary of the Zimbabwe Stock Exchange (ZSE), launched late last year as part of efforts to attract global capital, and also help restore foreign investor confidence in Zimbabwe’s capital markets.
Caledonia, which will be the third listing on the VFEX, joining SeedCo International and Padenga Holdings, will list by way of introduction of Depository Receipts as Caledonia’s shares cannot be directly traded in Zimbabwe, due to some limitations on the New York Stock Exchange where they are also listed.
Mr Steve Curtis, Caledonia’ chief executive said at the offer price of US$12,64 per depositary receipt, Caledonia expected to issue up to approximately 630 000 new shares, raising approximately US$7,96 million (before expenses) and the proceeds of the offer will be used for general corporate purposes in Zimbabwe.
“The support from Zimbabwe investors has been extremely encouraging and reinforces our belief that this listing is an important milestone, welcoming new shareholders, with a mutual desire for investment in Zimbabwe and who have not, until now, been able to participate in Caledonia’s growth journey.
“The VFEX listing will also enable Caledonia to progress with its next phase of development. The access to 100 percent USD (US dollar) revenue for incremental gold sales will assist Blanket, and any other new mine Caledonia develops, and will attract investors who are confident that Zimbabwe is a competitive investment environment capable of delivering attractive returns.
“The anticipated listing highlights our continued commitment to Zimbabwe. We are excited about this next stage, and I would like to thank everybody for their continued support,” he said in a statement.
According to the company, one of the benefits of a listing of depositary receipts representing the company’s shares on the Victoria Falls Stock Exchange (“VFEX”) in Zimbabwe is an improvement in the proportion of the revenues received in US dollars for gold produced at the company’s majority owned Blanket Mine and the company looks forward to benefiting from the development going forward.
Mr Curtis noted that Caledonia will announce the exact number of new shares, and depositary receipts, to be issued once subscription monies have been deposited and formalities have been completed in the next few days.
He added that once the securities are issued, the Company’s depositary in Zimbabwe will liaise with the VFEX to have the depositary receipts admitted to electronic trading in Zimbabwe and dealings will commence.
“The listing and dealings are expected to occur on or about December 2, 2021,” said Mr Curtis.
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