New York Stock Exchange listed Caledonia Mining Corporation has raised US$13m to fund its 12MW solar project at Blanket Mine as it moves to ensure adequate power supplies to ramp up output.
Zimbabwean based miners have been complaining of inadequate power supplies which have forced companies to invest in alternative sources of energy such as diesel powered generators which comes as an additional cost to firms.
In a recent notice, Caledonia said the money has been raised through at the market sale agreement with Cantor Fitzgerald & Co via the sale of 597,963 shares in the NYSE-listed firm.
“Following the issue of the ATM Shares, the Company has a total number of shares in issue of 12,118,823 common shares of no par value each,” Caledonia said.
Caledonia has no shares in treasury; therefore, this figure may be used by holders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in the company it said.
“As disclosed in the announcement on July 24, 2020, application was made to AIM for a block admission in respect of up to 800,000 new depositary interests representing the same number of shares in the share capital of the Company which will rank pari passu with the existing shares in issue,” it said.
Caledonia said it had cancelled the remaining portion of the block admission (202,037 depositary interests) effective as at September 7, 2020, given that the company has now raised the maximum amount of funds sought under the ATM Sales Agreement through the issue of the ATM Shares.
This represents the surplus shares that are not required to be sold and issued under the ATM Sales Agreement, according to Caledonia.
The 12MW solar project will take care of its base load electricity demand at the mine during daylight hours.
The solar power plant will create a more stable and reliable power source for operations, which is an important step towards preventing the loss of downtime and further de-risking the project.
The proposed solar project will supply approximately 30% of the Blanket mine’s total electricity requirements across a 24 hour period, including the evenings.
The company has since received a generating licence and the necessary approvals from the Zimbabwe Development Agency and has shortlisted contractors for the solar project.
Power cuts have hit corporates as they are forced to turn to diesel powered generators increasing the costs of doing business. The power cuts have seen companies turning to solar.
In March, financial services group, Old Mutual Zimbabwe Limited said it would construct a US$2.5m solar plant at its head office with a capacity to generate 650kWh. The plant will be running in October.
Last year, miners accused power utility, ZESA, of disregarding an agreement with the sector to ensure uninterrupted power supplies, a situation which has cost the resources industry millions of dollars in potential lost output.
A survey conducted by the Chamber of Mines of Zimbabwe last year showed that mining houses were getting a raw deal from ZESA despite paying for electricity in advance and in foreign currency.