TAURAI MANGUDHLA
New York Stock E xc h a n g e – l i s t e d , Caledonia Mining C o r p o r a t i o n (Caledonia) Plc, is in the market for three brown field gold mining projects towards the southern parts of Zimbabwe with a view to expand operations.
Caledonia’s Zimbabwean unit, Blanket Mine, is one of the major primary gold producers in the country.
Gold is the country’s largest foreign currency earner, accounting for about half of export revenues in the mining sector.
Caledonia chief financial officer, Mark Learmonth told Business Times negotiations with potential partners for the projects were underway, but progress was delayed due to trouble verifying shareholding in the assets in question.
“If we find reasonably priced assets we will get in. Right now we are looking at projects towards the south of the country, but it is fair to say that nothing we are looking at is in the Gwanda area,” Learmonth said.
“We are really anxious to invest further in Zimbabwe.” Despite foreign currency shortages and a weakening local dollar that is crippling business, Zimbabwe’s mining industry remains among the few pockets of opportunities, together with tourism and the property sector, attracting investors with a huge potential for growth in 2020 and beyond.
Learmonth said his company observed a trend where assets tend to be overpriced, perhaps because people’s value expectations are too much. “Zimbabwe has got its problems, but we are excited about the gold sector,” he said.
Assets can become fragmented over time and records difficult to access. “These are brown field projects,” he said, adding “the records in some cases make it difficult to really see who the owner of the mine is and there are some deals which are made in pubs but lack the real necessary paperwork,” he said.
The initiative comes after Caledonia indicated plans to possibly become a 90% shareholder in Blanket after recently becoming a 64% shareholder in the Zimbabwean Mine.
Caledonia in January completed a US$16.7m transaction for the acquisition of Fremiro’s 15% stake, following a 2018 policy shift which allowed foreigners to own more than 51% of gold mines.
And now, the company is considering mopping up all minority shares under various structures except for the 10% donated to the Gwanda Community Share Ownership Trust.
