Filed Pursuant to Rule 424(b)(5)
Registration No. 333-224784
PROSPECTUS SUPPLEMENT
(To Prospectus Dated May 9, 2018)
CALEDONIA MINING CORPORATION PLC
Up to $13,000,000
Common
Shares
Caledonia Mining Corporation Plc (the “Company”
or “Caledonia”) is hereby offering to sell common shares (“Common Shares”) having an aggregate
offering price of up to $13,000,000 under this prospectus supplement (the “Prospectus Supplement”) to the accompanying
prospectus of the Company which was declared effective by the United States Securities and Exchange Commission (the “SEC”)
on June 5, 2018 (the “Prospectus”).
The Company entered into a sales agreement
dated July 23, 2020 (the “Sales Agreement”), with Cantor Fitzgerald & Co. (the “Agent”)
relating to the sale of Common Shares. In accordance with the terms of the Sales Agreement and this Prospectus Supplement, the
Company may offer and sell Common Shares having an aggregate offering price of up to $13,000,000 (the “Offering”)
from time to time, on or after the date hereof, through the Agent.
Our Common Shares are listed on the NYSE
American LLC (“NYSE American”) under the symbol “CMCL” and depositary interests in our Common Shares
are admitted to trading on AIM of the London Stock Exchange plc (the “AIM”) under the symbol “CMCL”.
On July 22, 2020, the closing price of the Common Shares on the NYSE American was $24.44 and on the AIM was £17.10. We have
applied to list the Common Shares distributed under this Prospectus Supplement on the NYSE American. Listing will be subject to
us fulfilling all of the listing requirements of the NYSE American.
Upon our delivery of a placement notice
and subject to the terms and conditions of the Sales Agreement, sales of Common Shares, if any, under this Prospectus Supplement
and the accompanying Prospectus are anticipated to be made in transactions that are deemed to be an “at the market offering”
as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (“Securities Act”). Subject
to terms of the Sales Agreement, the Agent is not required to sell any specific number or dollar amounts of securities but will
act as a sales agent using commercially reasonable efforts consistent with its normal trading and sales practices, on mutually
agreed terms between the Agent and us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
The Company will pay the Agent compensation
for their services in acting as agent in the sale of Common Shares pursuant to the terms of the Sales Agreement. The Company will
pay the Agent compensation up to but not exceeding 3.0% of the gross proceeds from sales of Common Shares made thereunder. In connection
with the sale of Common Shares on our behalf, the Agent will be deemed to be an “underwriter” within the meaning of
the Securities Act and the compensation of the Agent will be deemed to be underwriting commissions or discounts.
An investment in our Common Shares
involves a high degree of risk and must be considered speculative due to the nature of our business and the present stage of exploration
and development of certain of our properties. Prospective investors should carefully consider the risk factors described in this
Prospectus Supplement and the Prospectus under “Risk Factors” and “Cautionary Note Regarding Forward-Looking
Statements” and the risk factors discussed in our annual report on Form 20-F for the year ended December 31, 2019, which
are incorporated by reference into this Prospectus Supplement and the Prospectus.
Neither the United States Securities
and Exchange Commission, nor any state securities regulator, has approved or disapproved the securities offered hereby or passed
upon the accuracy or adequacy of this Prospectus Supplement or the Prospectus. Any representation to the contrary is a criminal
offence.
The Common Shares offered by this
Prospectus Supplement have not been qualified for distribution by a prospectus in Canada and may not be offered or sold in Canada
during the course of their distribution.
This Prospectus Supplement is not
directed at, and may not be acted on by anyone in the United Kingdom. The Common Shares are not intended to be offered, sold
or otherwise made available to and, should not be offered, sold or otherwise made available to any investor in the United Kingdom.
This Prospectus Supplement has not been approved by the Financial Conduct Authority or by an authorised person within the
meaning of the Financial Services Act 2000 (“FSMA”). Reliance on this document for the purpose
of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets
invested. Any person who is in any doubt about the subject matter to which this document relates should consult a person
duly authorised for the purposes of FSMA who specialises in the acquisition of shares and other securities.
A copy of this Prospectus Supplement
and the Prospectus have been delivered to the Jersey Registrar of Companies in accordance with Article 5 of the Companies (General
Provisions) (Jersey) Order 2002, and the Jersey Registrar of Companies has given, and has not withdrawn, consent to its circulation.
The Jersey Financial Services Commission
(“JFSC”) has given, and has not withdrawn, its consent under Article 2 of the Control of Borrowing (Jersey) Order 1958
to the issue of shares in the Company. The JFSC is protected by the Control of Borrowing (Jersey) Law 1947 against any liability
arising from the discharge of its functions under that law.
It must be distinctly understood that,
in giving these consents, neither the Jersey Registrar of Companies nor the JFSC takes any responsibility for the financial soundness
of the Company or for the correctness of any statements made, or opinions expressed, with regard to it. If you are in any doubt
about the contents of this Prospectus Supplement or the Prospectus, you should consult your stockbroker, bank manager, solicitor,
accountant or other financial adviser.
The price of shares and the income
from them can go down as well as up. Nothing in this Prospectus Supplement, the Prospectus or anything communicated to holders
or potential holders of any of our shares (or interests in them) by or on our behalf is intended to constitute or should be construed
as advice on the merits of the purchase of or subscription for any shares (or interests in them) for the purposes of the Financial
Services (Jersey) Law 1998.
The directors of the Company have
taken all reasonable care to ensure that the facts stated in this Prospectus Supplement and Prospectus are true and accurate in
all material respects, and that there are no other facts the omission of which would make misleading any statement in the Prospectus
Supplement or Prospectus, whether of facts or opinion. All of our directors accept responsibility accordingly.
Cantor
The date of this Prospectus Supplement
is July 23, 2020.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
TABLE OF CONTENTS
PROSPECTUS
ABOUT THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS
This document is in two parts. The first
part is the Prospectus Supplement, including the documents incorporated by reference, which describes the specific terms of this
Offering. The second part, the Prospectus, including the documents incorporated by reference therein, provides more general information.
References to this Prospectus may refer to both parts of this document combined. You are urged to carefully read this Prospectus
Supplement and the Prospectus, and the documents incorporated herein and therein by reference, before buying any of the Common
Shares being offered under this Prospectus Supplement. This Prospectus Supplement may add, update or change information contained
in the Prospectus. To the extent that any statement made in this Prospectus Supplement is inconsistent with statements made in
the Prospectus or any documents incorporated by reference herein, the statements made in this Prospectus Supplement will be deemed
to modify or supersede those made in the Prospectus and such documents incorporated by reference.
Only the information contained or incorporated
by reference in this Prospectus Supplement and the Prospectus should be relied upon. Neither us nor the Agent has authorized any
other person to provide different information. If anyone provides different or inconsistent information, it should not be relied
upon. The Common Shares offered hereunder may not be offered or sold in any jurisdiction where the offer or sale is not permitted.
It should be assumed that the information appearing in this Prospectus Supplement and the Prospectus and the documents incorporated
by reference herein and therein are accurate only as of their respective dates. Our business, financial condition, results of operations
and prospects may have changed since those dates.
This Prospectus Supplement does not constitute,
and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this
Prospectus Supplement by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
In this Prospectus Supplement, unless
stated otherwise, the “Company,” “Caledonia” “we,” “us” and “our” refer
to Caledonia Mining Corporation Plc and its subsidiaries, and all references to “dollars” or “$” are references
to U.S. dollars unless otherwise specified.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This Prospectus Supplement and the Prospectus,
including the documents incorporated herein and therein by reference, contain “forward-looking information” and “forward-looking
statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties relating, but not limited to, our current expectations, intentions, plans, and beliefs. Forward-looking information
can often be identified by forward-looking words such as “anticipate”, “believe”, “expect”,
“goal”, “plan”, “target”, “intend”, “estimate”, “could”,
“should”, “may” and “will” or the negative of these terms or similar words suggesting future
outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance.
Examples of forward-looking information in this Prospectus Supplement and the Prospectus include: our reserve calculations with
underlying assumptions, production guidance, estimates of future/targeted production rates, planned mill capacity increases, estimates
of future metallurgical recovery rates and the ability to maintain high metallurgical recovery rates, our plans and timing regarding
further exploration, drilling and development, the prospective nature of exploration and development targets, the ability to upgrade
and convert mineral reserves, investment in the construction of a solar power plant, estimates of solar power plant capacity and
ability to provide power, the impact of a solar power plant on existing operations, future enhancements to a solar power plant,
capital costs, our intentions with respect to financial position and third party financing and future dividend payments. This forward-looking
information is based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results,
performance or achievements to be materially different from those expressed or implied by forward-looking information. Such factors
and assumptions include, but are not limited to: failure to establish estimated reserves, the grade and recovery of ore which is
mined varying from estimates, success of future exploration and drilling programs, reliability of drilling, sampling and assay
data, assumptions regarding the representativeness of mineralization being inaccurate, success of planned metallurgical test-work,
construction costs and timeline for construction of a solar power plant varies from estimates, electrical output and ability to
use power generated at a solar power plant varies from estimates, capital and operating costs varying significantly from estimates,
delays in obtaining or failures to obtain required governmental, environmental or other project approvals, changes in government
regulations, legislation and rates of taxation, inflation, changes in exchange rates and the availability of foreign exchange,
fluctuations in commodity prices, delays in the development of projects and other factors.
Shareholders, potential shareholders and
other prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other
factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Such factors
include, but are not limited to: risks relating to estimates of mineral reserves proving to be inaccurate, fluctuations in gold
price, risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards,
industrial accidents, unusual or unexpected geological or structural formations, pressures, power outages, explosions, landslides,
cave-ins and flooding), risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties
with whom we do business; risks relating to the investment in the construction of a solar power plant and the use of power generated
by a solar power plant; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards, employee relations;
relationships with and claims by local communities and indigenous populations; political risk; risks related to natural disasters,
terrorism, civil unrest, public health concerns (including health epidemics or outbreaks of communicable diseases such as the coronavirus);
availability and increasing costs associated with mining inputs and labor; the speculative nature of mineral exploration and development,
including the risks of obtaining or maintaining necessary licenses and permits, diminishing quantities or grades of mineral reserves
as mining occurs; global financial condition, the actual results of current exploration activities, changes to conclusions of economic
evaluations, and changes in project parameters to deal with un-anticipated economic or other factors, risks of increased capital
and operating costs, environmental, safety or regulatory risks, expropriation, our title to properties including ownership thereof,
increased competition in the mining industry for properties, equipment, qualified personnel and their costs, risks relating to
the uncertainty of timing of events including targeted production rate increase and currency fluctuations. Shareholders, potential
shareholders and other prospective investors are cautioned not to place undue reliance on forward-looking information. By its nature,
forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute
to the possibility that the predictions, forecasts, projections and various future events will not occur. We undertake no obligation
to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or
other such factors which affect this information, except as required by law. For the reasons set forth above, investors should
not place undue reliance on forward-looking statements.
Additional risks and uncertainties relating
to us and our business can be found in the “Risk Factors” section of this Prospectus Supplement and the Prospectus,
as well as in our other documents incorporated by reference herein.
DOCUMENTS INCORPORATED BY REFERENCE
Information has been incorporated by
reference in this Prospectus Supplement from documents filed with the SEC and is therefore deemed to be incorporated by reference
into the Prospectus for purposes of this Offering. Copies of documents incorporated herein by reference may be obtained on
request without charge from our Company Secretary at B006 Millais House, Castle Quay, St Helier, Jersey JE2 3EF (telephone +44
1534 679800). Our filings through the SEC’s Electronic Data Gathering, Analysis and Retrieval system, which is commonly known
by the acronym “EDGAR,” may be accessed at www.sec.gov, are not incorporated by reference in this Prospectus
except as specifically set out herein.
The following documents which have been
filed by us with the SEC, are also specifically incorporated by reference into, and form an integral part of the Prospectus, as
supplemented by this Prospectus Supplement:
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(a)
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The Company’s Annual Report on Form 20-F for the year ended December 31, 2019, filed with
the SEC on March 31, 2020;
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(b)
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The Company’s management information circular for the annual general meeting of shareholders
held on May 6, 2020, which was included as Exhibit 99.2 to the Form 6-K Report of Foreign Issuer filed with the SEC on May 19,
2020; and
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(c)
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The Company’s Form 6-K Reports of Foreign Issuer filed with the SEC on April 1, 2020, April
9, 2020, April 27, 2020, April 29, 2020, May 6, 2020, May 12, 2020, May 19, 2020, June 3, 2020, June 5, 2020, June 8, 2020, June
12, 2020, June 29, 2020, July 9, 2020 and July 15, 2020.
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Any statement contained herein or
in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the
purposes of this Prospectus Supplement and the Prospectus to the extent that a statement contained herein, or in any other subsequently
filed document which also is incorporated or is deemed to be incorporated by reference herein, modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus Supplement and the Prospectus.
We will provide to each person, including
any beneficial owner, to whom a Prospectus is delivered, a copy of any or all of the information that has been incorporated by
reference in the Prospectus but not delivered with the Prospectus. We will provide this information, at no cost to the requester,
upon written or oral request at the following address or telephone number: B006 Millais House, Castle Quay, St Helier, Jersey JE2
3EF (telephone +44 1534 679800).
RISK FACTORS
An investment in our Common Shares is subject
to a number of risks. A prospective purchaser of our Common Shares should carefully consider the information and risks faced by
us described in this Prospectus Supplement, the Prospectus and the documents incorporated herein and therein by reference, including
without limitation the risk factors set out under the headings “Risk Factors” in our Annual Report on Form 20-F for
the year ended December 31, 2019.
Our operations are highly speculative due
to the high-risk nature of our business, which include the acquisition, financing, exploration, development of mineral infrastructure
and operation of mines. The risks and uncertainties set out below are not the only ones we face. Additional risks and uncertainties
not currently known to us or that we currently deem immaterial may also impair our operations. If any of the risks actually occur,
our business, financial condition and operating results could be adversely affected. As a result, the trading price of our shares
could decline and investors could lose part or all of their investment. Our business is subject to significant risks and past performance
is no guarantee of future performance.
Risks Related to this Offering and
our Common Shares
Management will have broad
discretion as to the use of the proceeds from this Offering and may not use the proceeds as proposed.
Although we expect to use the amount of
net proceeds from this Offering for investment in the construction of a solar power plant to supply Blanket Mine (1983) (Private)
Limited in Zimbabwe (the “Blanket Mine”), our management team will have broad discretion as to the application
of the net proceeds from this Offering and could use them for purposes other than those contemplated at the time of the Offering.
Our management may use the net proceeds for other corporate purposes that may have an alternative effect on our financial condition
or market value.
We may incur additional costs or
delays in the development, construction and operation of the proposed solar power plant or improvements to it and may not be able
to recover its investment or complete the project.
We propose to use the proceeds from this
Offering to construct a solar power plant to supply some of Blanket Mine’s power demand. The development, construction, expansion
or modification of the plant is likely to involve many risks, including:
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maintaining necessary permits and licenses;
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reliance on Blanket Mine continuing to operate, and require power from the plant;
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environmental remediation of soil or groundwater at the site;
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unforeseen engineering, environmental and geological problems;
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unanticipated cost overruns;
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failure of contracting parties to perform under contracts, including engineering procurement construction
contractors; and
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inability to obtain financing.
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You will experience dilution
as a result of the Offering.
Giving effect to the issuance of Common
Shares in this Offering, the receipt of the expected net proceeds and the use of those proceeds, this Offering will have a dilutive
effect on our expected net income available to our shareholders per share and funds from operations per share. The dilution per
share to an investor participating in this Offering will be $13.60 (see “Dilution” below).
You may experience future dilution
as a result of future equity offerings.
We are not restricted from issuing additional
securities in the future, including Common Shares, securities that are convertible into or exchangeable for, or that represent
the right to receive, Common Shares or substantially similar securities. To the extent that we raise additional funds through the
sale of equity or convertible debt securities, the issuance of such securities could result in dilution to our shareholders. We
may sell Common Shares or other securities in any other offering at a price per share that is less than the price per share paid
by investors in this Offering, and investors purchasing Common Shares or other securities in the future could have rights superior
to existing shareholders. The price per share at which we sell additional Common Shares, or securities convertible or exchangeable
into Common Shares, in future transactions may be higher or lower than the price per share paid by investors in this Offering.
THE COMPANY
Overview
Caledonia Mining Corporation Plc (previously
Caledonia Mining Corporation) was incorporated, effective February 5, 1992, by the amalgamation of three predecessor companies
and was registered at the time under the Canada Business Corporations Act. Following the creation of Caledonia, our shares were
listed on the Toronto Stock Exchange (“TSX”).
Effective April 1, 2006, we purchased 100%
of the issued shares of the Zimbabwean company, Caledonia Holdings Zimbabwe (Private) Ltd (“CHZ”) that held
100% of the shares of Blanket Mine. The purchase consideration was $1,000,000 and 20,000,000 of our shares; subsequently, we conducted
share consolidations in 2013 and 2017, at ratios of 10:1 and 5:1, respectively. We acquired all the assets and assumed all the
liabilities of CHZ. In 2012, we complied with indigenization legislation in Zimbabwe which resulted in a reduction in our shareholding
in Blanket Mine to 49%. We completed a transaction in January 2020 whereby we purchased a 15% shareholding in Blanket Mine from
one of the indigenous shareholders, resulting in our current holding of 64% in Blanket Mine. We re-domiciled from Canada to Jersey
using a legal process called “Continuance” on March 19, 2016. We operate under the Companies (Jersey) Law 1991,
as amended, (the “Companies Law”). Our shares began trading on the NYSE American on July 27, 2017 and on June
19, 2020 we voluntarily delisted our Common Shares from the TSX.
Our primary focus is the operation of a
gold mine and the exploration and development of mineral properties for precious metals. Our activities are focused on the Blanket
Mine in Zimbabwe. Our business during the last three completed fiscal years has been focused primarily on increasing production
to 80,000 oz. of gold by 2022 through our investment plan. Total gold production at Blanket Mine for 2019 was 55,182 oz. (2018:
54,511 oz.; 2017: 56,133 oz.). In terms of regulations introduced by the Zimbabwean Ministry of Finance in January 2014, all gold
produced in Zimbabwe must be sold to Fidelity Printers and Refiners Limited, a company which is controlled by the Zimbabwean authorities.
Gold producers compete globally based on their operating and capital costs. Certain gold producers benefit from their ability to
produce other minerals in commercial quantities as by-products. We derive approximately 0.1% of our revenues from silver, which
is insignificant. 100% of Blanket Mine’s revenues over the last three years was derived from its operations in Zimbabwe.
For a detailed description of our business
refer to “Item 4 – Information on the Company” in our Annual Report on Form 20-F for the year ended December
31, 2019.
Our registered and head office is located
at B006 Millais House, Castle Quay, St. Helier, Jersey, Channel Islands, JE2 3EF. Our African office for our South African subsidiaries
is located at 1 Quadrum office park, 4th floor, Johannesburg, Gauteng, 2198, South Africa. We maintain a website at
http://www.caledoniamining.com that contains information about our company. Information on this web site is not part of this
Prospectus Supplement.
DIVIDENDS
We have historically paid quarterly dividends
since 2014. On April 1, 2020, we announced that our board of directors (the “Board”) had deferred its approval
of the quarterly dividend that would ordinarily have been declared and paid in April 2020 due to the uncertainty surrounding the
COVID-19 pandemic. However, on April 29, 2020, we announced this dividend would be paid at the end of May 2020 at a rate of 7.5
cents per share. On June, 29, 2020, we announced a further increase in the dividend, to 8.5 cents per share, which will be paid
at the end of July 2020.
The Board will consider the continuation
of the dividend and any future increases in the dividend as appropriate in line with its prudent approach to risk.
CONSOLIDATED CAPITALIZATION
Since May 12, 2020, the date of our most
recently filed financial statements, the only material change to our share capital, on a consolidated basis, was the issuance of
2,500 Common Shares pursuant to the exercise of share options on June 3, 2020 and the issuance of 2,500 Common Shares pursuant
to the exercise of share options on June 12, 2020.
We had 11,515,860 Common Shares, 38,000
stock options, 17,744 restricted share units and 262,002 performance units outstanding as at May 12, 2020.
DILUTION
As of March 31, 2020, our net tangible
book value was approximately $118.3 million, or $10.27 per share. Net tangible book value is total assets minus the sum of liabilities,
intangible assets and non-controlling interests. Net tangible book value per share is net tangible book value divided by the total
number of our Common Shares outstanding as of March 31, 2020.
Dilution in net tangible book value per
share represents the difference between the amount per share paid by purchasers of our Common Shares in this Offering and the net
tangible book value per share of our Common Shares immediately after completion of this Offering. Assuming that an aggregate of 531,914
Common Shares are sold at a price of $24.44 per share, and after deducting the commissions and estimated Offering expenses payable
by us, our as-adjusted net tangible book value as of March 31, 2020 would have been approximately $130.6 million, or $10.84 per
share. This increases the net tangible book value per share to existing shareholders and immediate dilution in net tangible book
value of $13.60 per share to investors purchasing our Common Shares in this Offering. The following table illustrates this dilution
on a per share basis:
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Assumed public Offering price per share
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$
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24.44
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Net tangible book value per share as of March 31, 2020
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$
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10.27
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Increase in net tangible book value per share attributable to this Offering
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$
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0.57
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As adjusted net tangible book value per share as of March 31, 2020
after giving effect to this Offering
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$
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10.84
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Dilution per share to investor participating in this Offering
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$
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13.60
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The table above assumes for illustrative
purposes that an aggregate of 531,914 Common Shares are sold during the term of the Offering at an Offering price of $24.44
per share, which was the last reported sale price of our Common Shares on the NYSE American on July 22, 2020, for aggregate gross
proceeds of approximately $13,000,000. The Common Shares subject to the Sales Agreement are being sold from time to time at various
prices. An increase of $2.00 per share in the price at which the shares are sold from the assumed Offering price of $24.44 per
share shown in the table above, assuming all of our Common Shares in the aggregate amount of approximately $13,000,000 during the
term of the Offering are sold at that price, would increase our adjusted net tangible book value per share after the Offering to
$10.88 per share and would dilute the net tangible book value per share to new investors in this Offering by $15.56 per share,
after deducting commissions and estimated aggregate Offering expenses payable by us. A decrease of $2.00 per share in the price
at which the shares are sold from the assumed Offering price of $24.44 per share shown in the table above, assuming all of our
Common Shares in the aggregate amount of $13,000,000 during the term of the Offering are sold at that price, would increase our
adjusted net tangible book value per share after the Offering to $10.80 per share and would dilute the net tangible book value
per share to new investors in this Offering by $11.64 per share, after deducting commissions and estimated Offering expenses payable
by us. This information is supplied for illustrative purposes only and may differ based on the actual Offering price and the actual
number of shares offered.
The discussion and table above are based
on 11,515,860 Common Shares outstanding as of March 31, 2020, and excludes the following, in each case as of such date:
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38,000 Common Shares issuable upon the exercise of outstanding stock options having a weighted-average exercise price of $8.88
per share;
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17,744 Common Shares which may be, subject to election by the holder and the terms of the relevant award agreement, issuable
upon vesting of outstanding restricted share units; and
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262,002 Common Shares which may be, subject to election by the holder and the terms of the relevant award agreement and
as may be modified by the extent to which performance conditions are met, issuable upon vesting and exercise of outstanding
performance units.
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To the extent that any of these shares
are issued upon exercise of outstanding options, vesting of restricted stock units, vesting and exercise of performance units or
otherwise, investors purchasing our Common Shares in this Offering may experience further dilution. In addition, we may choose
to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for
our current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible
debt securities, the issuance of these securities could result in further dilution to our shareholders.
Subsequent to the quarter ended March 31,
2020, we issued 5,000 Common Shares pursuant to the exercise of aforementioned stock options, and our issued and outstanding Common
Shares as of June 5, 2020 were 11,520,860. We also issued 1,740 performance units on June 1, 2020.
USE OF PROCEEDS
The net proceeds from the Offering are
not determinable in light of the nature of the distribution. The net proceeds of any given distribution of Common Shares through
the Agent in an “at the market offering” will represent the gross proceeds after deducting the applicable compensation
payable to the Agent under the Sales Agreement and the expenses of the distribution.
The proceeds of the Offering are proposed
to be used to fund the construction of a solar power plant which is expected to generate approximately 12MWac. The plant, when
fully operational, will be 100% owned and operated by a wholly owned subsidiary of us which will sell the electricity produced
to Blanket Mine, in which we have a 64% shareholding.
The plant is primarily intended to reduce
Blanket Mine’s reliance on diesel generators which have been used with increased frequency over the last 18 months due to
the instability of the electrical power provided via the Zimbabwean grid and the increased frequency of power outages due to a
shortfall of electricity generating capacity in Zimbabwe compared to electricity demand. Once complete, the plant is expected to
provide 100% of Blanket Mine’s minimum demand for electricity during daylight hours: grid power and diesel generators will
continue to be used to provide power which exceeds Blanket Mine’s minimum demand during daylight hours and all of Blanket
Mine’s power requirements at nighttime and during any periods when the plant may not be generating during daylight hours.
It is estimated that, upon the plant becoming operational (expected mid-2021, when the mine is expected to produce approximately
75,000 ounces of gold), it will provide approximately 27% of Blanket Mine’s total electricity demand at that time. The plant
may be extended in the future to meet Blanket Mine’s maximum demand during daylight hours. However, any such expansion would
require an agreement with the Zimbabwe authorities as to the treatment of power generated by the expanded plant which exceeds Blanket
Mine’s requirements. The plant may also be enhanced to include batteries.
The primary objective of the plant is to
reduce the financial risk to Blanket Mine of any further deterioration in the quality of the grid power which would necessitate
increased use of the diesel generators, which are substantially more expensive than grid power. The plant should also reduce Blanket
Mine’s environmental footprint.
At the anticipated usage rate of grid power,
solar power and diesel-generated power, the plant is expected to have a neutral financial effect on Blanket Mine. However, in the
event that the grid power supply worsens, which in the absence of the solar plant would require increased use of generators, the
plant is expected to improve Blanket Mine’s financial performance.
The plant is expected to have a slight
positive financial effect on us in terms of net present value per share, after taking into account the dilutive effect of the Offering,
because of the additional revenue stream which will accrue to us from the solar plant.
PLAN OF DISTRIBUTION
The Company has entered into the Sales
Agreement with the Agent under which it may issue and sell from time to time Common Shares through the Agent. Pursuant to this
Prospectus Supplement, we may issue and sell up to an additional $13,000,000 of Common Shares through the Agent from and after
the date hereof.
Sales of Common Shares, if any, will be
made in transactions that are deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under
the Securities Act. Subject to the terms and conditions of the Sales Agreement and upon instructions from the Company, the Agent
will use its commercially reasonable efforts, consistent with its customary trading and sales practices and applicable laws, to
sell the Common Shares in accordance with the parameters specified by the Company and as set out in the Sales Agreement. The Common
Shares will be distributed at market prices prevailing at the time of the sale. As a result, prices may vary as between purchasers
and during the period of distribution.
The Company will instruct the Agent as
to the number of Common Shares to be sold by the Agent from time to time by sending the Agent a notice (a “Placement Notice”)
that requests that the Agent sell up to a specified dollar amount or a specified number of Common Shares and specifies any parameters
in accordance with which the Company requires that the Common Shares be sold. The parameters set forth in a Placement Notice may
not conflict with the provisions of the Sales Agreement. The Company or the Agent may suspend the offering of Common Shares upon
proper notice and subject to other conditions set forth in the Sales Agreement.
The Company will pay the Agent for its
services in acting as agent in the sale of Common Shares, pursuant to the terms of the Sales Agreement, compensation up to but
not exceeding 3.0% of the gross proceeds from sales of Common Shares made thereunder. The Agent will be the only person or company
paid an underwriting fee or commission in connection with the Offering. The Company has also agreed pursuant to the Sales Agreement
to reimburse the Agent for certain specified expenses, including the fees and disbursements of their legal counsel in an amount
not to exceed $75,000. The Company estimates that the total expenses that it will incur for the Offering (including fees payable
to stock exchanges, securities regulatory authorities, its counsel and its auditors, but excluding compensation payable to the
Agent under the terms of the Sales Agreement) will be approximately $319,000. Settlement for sales of Common Shares will occur
on the second business day following the date on which any sales are made, or on such other date as is current industry practice
for regular-way trading, in return for payment of the net proceeds to the Company. Sales of Common Shares as contemplated in this
Prospectus Supplement will be settled through the facilities of The Depository Trust Company or by such other means as the Company
and the Agent may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
In connection with the sale of the Common
Shares on behalf of the Company, the Agent will be deemed an “underwriter” as defined in applicable securities legislation
under the Securities Act, and the compensation of the Agent will be deemed to be underwriting commissions or discounts.
The Company has agreed to provide indemnification
and contribution to the Agent against, among other things, certain civil liabilities, including liabilities under the Securities
Act.
The offering of Common Shares pursuant
to the Sales Agreement will terminate in accordance with the terms of the Sales Agreement. The Agent may terminate the Sales Agreement
under the circumstances specified in the Sales Agreement. The Company and the Agent may also terminate the Sales Agreement upon
giving the other party ten (10) days’ notice. In addition, the Company may terminate the Sales Agreement by providing the
Agent five (5) days’ notice when no Placement Notice is in effect.
The Agent and its respective affiliates
may in the future provide various investment banking, commercial banking and other financial services for us and our affiliates,
for which services they may in the future receive customary fees. To the extent required by Regulation M under the Exchange Act,
the Agent will not engage in any market making activities involving our Common Shares while the Offering is ongoing under this
Prospectus Supplement.
This Prospectus Supplement and the accompanying
Prospectus in electronic format may be made available on websites maintained by the Agent, and the Agent may distribute this Prospectus
Supplement and the accompanying Prospectus electronically.
DESCRIPTION OF SECURITIES BEING OFFERED
The Offering consists of Common Shares
having an aggregate offering price of up to $13,000,000.
Common Shares
As of March 31, 2020, there were 11,515,860
Common Shares issued and outstanding.
The holders of our Common Shares are entitled
to receive notice of all shareholder meetings and to attend and vote at such meetings. Certificates representing the Common Shares
are issued in registered form. Registered shareholders are entitled to one vote for each Common Share held on all matters to be
voted on by the shareholders. Each Common Share is equal to every other Common Share and, subject to the rights of holders of shares
ranking senior to the Common Shares, if any, each Common Share is entitled to receive pro rata such dividends as may be declared
by the board of directors out of funds legally available therefor and to participate equally in the event of our liquidation, dissolution
or winding up, whether voluntary or involuntary, or any other distribution of our assets among the shareholders for the purpose
of winding up our affairs after we have paid out our liabilities. Common Shares are not subject to call or assessment. There are
no pre-emptive or conversion rights, and no provisions at this time for redemption, purchase or cancellation, surrender, sinking
fund or purchase fund. In addition, there are no provisions in our articles of association discriminating against any existing
or prospective holders of such securities as a result of a shareholder owning a substantial number of shares.
CERTAIN UNITED STATES FEDERAL INCOME
TAX CONSIDERATIONS
The following is a general summary of certain
material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the
acquisition, ownership, and disposition of Common Shares acquired pursuant to the Offering.
This summary is for general information
purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations
that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of Common Shares. In addition,
this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the
U.S. federal income tax consequences to such U.S. Holder, including, without limitation, specific tax consequences to a U.S. Holder
under an applicable income tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or
U.S. federal income tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal alternative minimum,
U.S. federal net investment income, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences to U.S. Holders
of the acquisition, ownership, and disposition of Common Shares. In addition, except as specifically set forth below, this summary
does not discuss applicable tax reporting requirements. Each prospective U.S. Holder should consult its own tax advisor regarding
the U.S. federal income, U.S. federal alternative minimum, U.S. federal net investment income, U.S. federal estate and gift, U.S.
state and local, and non-U.S. tax consequences relating to the acquisition, ownership, and disposition of Common Shares.
No opinion from legal counsel or ruling
from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S. federal
income tax consequences of the acquisition, ownership, and disposition of Common Shares. This summary is not binding on the IRS,
and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary.
In addition, because the authorities on which this summary are based are subject to various interpretations, the IRS and the U.S.
courts could disagree with one or more of the conclusions described in this summary.
Scope of this Summary
Authorities
This summary is based on the Internal Revenue
Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary, or proposed), published
rulings of the IRS, published administrative positions of the IRS and U.S. court decisions that are applicable, and, in each case,
as in effect and available, as of the date of this document. Any of the authorities on which this summary is based could be changed
in a material and adverse manner at any time, and any such change could be applied retroactively. This summary does not discuss
the potential effects, whether adverse or beneficial, of any proposed legislation.
U.S. Holders
For purposes of this summary, the term
“U.S. Holder” means a beneficial owner of Common Shares acquired pursuant to the Offering that is for U.S. federal
income tax purposes:
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an individual who is a citizen or resident of the United States;
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a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) organized
under the laws of the United States, any state thereof or the District of Columbia;
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an estate whose income is subject to U.S. federal income taxation regardless of its source; or
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a trust that (i) is subject to the primary supervision of a court within the United States and
the control of one or more U.S. persons for all substantial decisions or (ii) has a valid election in effect under applicable Treasury
Regulations to be treated as a U.S. person.
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U.S. Holders Subject to Special U.S.
Federal Income Tax Rules Not Addressed
This summary does not address the U.S.
federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including,
but not limited to, U.S. Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts,
or other tax-deferred accounts; (b) are financial institutions, underwriters, insurance companies, real estate investment trusts,
or regulated investment companies; (c) are broker-dealers, dealers, or traders in securities or currencies that elect to apply
a mark-to-market accounting method; (d) have a “functional currency” other than the U.S. dollar; (e) own Common Shares
as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other integrated transaction; (f) acquire
Common Shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) hold Common
Shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes);
(h) are subject to special tax accounting rules; (i) are U.S. expatriates or former long-term residents of the U.S.; or (j) own,
have owned or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power or value of the
outstanding shares of the Company. This summary also does not address the U.S. federal income tax considerations applicable to
U.S. Holders who are subject to taxing jurisdictions other than, or in addition to, the United States. U.S. Holders that are subject
to special provisions under the Code, including, but not limited to, U.S. Holders described immediately above, should consult their
own tax advisor regarding the U.S. federal income, U.S. federal alternative minimum, U.S. federal net investment income, U.S. federal
estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of
Common Shares.
If an entity or arrangement that is classified
as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds Common Shares, the U.S.
federal income tax consequences to such entity and the partners (or other owners) of such entity generally will depend on the activities
of the entity and the status of such partners (or owners). This summary does not address the tax consequences to any such partner
(or owner). Partners (or other owners) of entities or arrangements that are classified as partnerships or as “pass-through”
entities for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences
arising from and relating to the acquisition, ownership, and disposition of Common Shares.
Ownership and Disposition of Common Shares
The following discussion is subject in
its entirety to the rules described below under the heading “Passive Foreign Investment Company Rules”.
Taxation of Distributions
A U.S. Holder that receives a distribution,
including a constructive distribution, with respect to a Common Share will be required to include the amount of such distribution
in gross income as a dividend (without reduction for any foreign income tax withheld from such distribution) to the extent of the
current or accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax purposes. To
the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution
will be treated first as a tax-free return of capital to the extent of a U.S. Holder's tax basis in the Common Shares and thereafter
as gain from the sale or exchange of such Common Shares (see “Sale or Other Taxable Disposition of Common Shares”
below). However, the Company may not maintain the calculations of its earnings and profits in accordance with U.S. federal income
tax principles, and each U.S. Holder may have to assume that any distribution by the Company with respect to the Common Shares
will constitute dividend income. Dividends received on Common Shares by corporate U.S. Holders generally will not be eligible for
the “dividends received deduction”. Subject to applicable limitations and provided the Common Shares are readily tradable
on a United States securities market, dividends paid by the Company to non-corporate U.S. Holders, including individuals, generally
will be eligible for the preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period
and other conditions are satisfied, including that the Company not be classified as a PFIC (as defined below) in the tax year of
distribution or in the preceding tax year. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor
regarding the application of such rules.
Sale or Other Taxable Disposition of Common Shares
A U.S. Holder will generally recognize
gain or loss on the sale or other taxable disposition of Common Shares in an amount equal to the difference, if any, between (a)
the amount of cash plus the fair market value of any property received and (b) such U.S. Holder's tax basis in such Common Shares
sold or otherwise disposed of. Any such gain or loss generally will be capital gain or loss, which will be long-term capital gain
or loss if, at the time of the sale or other disposition, such Common Shares are held for more than one year.
Preferential tax rates apply to long-term
capital gains of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term
capital gains of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under
the Code.
Passive Foreign Investment Company Rules
If the Company were to constitute a “passive
foreign investment company” (“PFIC”) for any year during a U.S. Holder's holding period, then certain
potentially adverse rules would affect the U.S. federal income tax consequences to a U.S. Holder resulting from the acquisition,
ownership and disposition of Common Shares. The Company believes that it was not a PFIC for the prior tax year, and based on current
business plans and financial expectations, the Company expects that it will not be a PFIC for the current tax year and expects
that it will not be a PFIC for the foreseeable future. No opinion of legal counsel or ruling from the IRS concerning the status
of the Company as a PFIC has been obtained or is currently planned to be requested. However, PFIC classification is fundamentally
factual in nature, generally cannot be determined until the close of the tax year in question, and is determined annually. In addition,
the analysis depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations.
Consequently, there can be no assurance that the Company has never been and will not become a PFIC for any tax year during which
U.S. Holders hold Common Shares.
In any year in which the Company is classified
as a PFIC, a U.S. Holder will be required to file an annual report with the IRS containing such information as Treasury Regulations
and/or other IRS guidance may require. In addition to penalties, a failure to satisfy such reporting requirements may result in
an extension of the time period during which the IRS can assess a tax. U.S. Holders should consult their own tax advisors regarding
the requirements of filing such information returns under these rules, including the requirement to file an IRS Form 8621 annually.
The Company generally will be a PFIC if,
after the application of certain “look-through” rules with respect to subsidiaries in which the Company holds at least
25% of the value of such subsidiary, for a tax year, (a) 75% or more of the gross income of the Company for such tax year is passive
income (the “income test”) or (b) 50% or more of the value of the Company's assets either produce passive income or
are held for the production of passive income (the “asset test”), based on the quarterly average of the fair market
value of such assets. “Gross income” generally includes all sales revenues less the cost of goods sold, plus income
from investments and from incidental or outside operations or sources, and “passive income” generally includes, for
example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains
from commodities transactions. Active business gains arising from the sale of commodities generally are excluded from passive income
if substantially all of a foreign corporation's commodities are stock in trade or inventory, depreciable property used in a trade
or business or supplies regularly used or consumed in the ordinary course of its trade or business, and certain other requirements
are satisfied.
If the Company were a PFIC in any tax year
during which a U.S. Holder held Common Shares, such holder generally would be subject to special rules with respect to “excess
distributions” made by the Company on the Common Shares and with respect to gain from the disposition of Common Shares. An
“excess distribution” generally is defined as the excess of distributions with respect to the Common Shares received
by a U.S Holder in any tax year over 125% of the average annual distributions such U.S. Holder has received from the Company during
the shorter of the three preceding tax years, or such U.S. Holder's holding period for the Common Shares. Generally, a U.S. Holder
would be required to allocate any excess distribution or gain from the disposition of the Common Shares ratably over its holding
period for the Common Shares. Such amounts allocated to the year of the disposition or excess distribution would be taxed as ordinary
income, and amounts allocated to prior tax years would be taxed as ordinary income at the highest tax rate in effect for each such
year and an interest charge at a rate applicable to underpayments of tax would apply.
While there are U.S. federal income tax
elections that sometimes can be made to mitigate these adverse tax consequences (including the “QEF Election” under
Section 1295 of the Code and the “Mark-to-Market Election” under Section 1296 of the Code), such elections are available
in limited circumstances and must be made in a timely manner.
U.S. Holders should be aware that, for
each tax year, if any, that the Company is a PFIC, the Company can provide no assurances that it will satisfy the record keeping
requirements or make available to U.S. Holders the information such U.S. Holders require to make a QEF Election with respect to
the Company or any subsidiary that also is classified as a PFIC.
Certain additional adverse rules may apply
with respect to a U.S. Holder if the Company is a PFIC, regardless of whether the U.S. Holder makes a QEF Election. These rules
include special rules that apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC.
Subject to these special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally
eligible for the foreign tax credit. U.S. Holders should consult their own tax advisors regarding the potential application of
the PFIC rules to the ownership and disposition of Common Shares, and the availability of certain U.S. tax elections under the
PFIC rules.
Additional Considerations
Receipt of Foreign Currency
The amount of any distribution paid to
a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of Common Shares, generally will be equal
to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether
such foreign currency is converted into U.S. dollars at that time). A U.S. Holder will have a basis in the foreign currency equal
to its U.S. dollar value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of the foreign currency after
the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally
will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method
of tax accounting. Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences
of receiving, owning, and disposing of foreign currency.
Foreign Tax Credit
Subject to the PFIC rules discussed above,
a U.S. Holder that pays (whether directly or through withholding) foreign income tax with respect to dividends paid on the Common
Shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such foreign
income tax. Generally, a credit will reduce a U.S. Holder's U.S. federal income tax liability on a dollar-for-dollar basis, whereas
a deduction will reduce a U.S. Holder's income that is subject to U.S. federal income tax. This election is made on a year-by-year
basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year. The foreign
tax credit rules are complex and involve the application of rules that depend on a U.S. Holder's particular circumstances. Accordingly,
each U.S. Holder should consult its own U.S. tax advisor regarding the foreign tax credit rules.
Backup Withholding and Information Reporting
Under U.S. federal income tax law and Treasury
Regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement
in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who
are U.S. Holders that hold certain specified foreign financial assets in excess of certain threshold amounts. The definition of
specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also,
unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial
instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign
entity. U. S. Holders may be subject to these reporting requirements unless their Common Shares are held in an account at certain
financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should
consult their own tax advisors regarding the requirements of filing information returns, including the requirement to file an IRS
Form 8938.
Payments made within the U.S. or by a U.S.
payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, Common Shares will
generally be subject to information reporting and backup withholding tax, at the rate of 24%, if a U.S. Holder (a) fails to furnish
such U.S. Holder's correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer
identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject
to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S.
taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax.
However, certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding
is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules generally will be allowed as a credit
against a U.S. Holder's U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required
information to the IRS in a timely manner.
The discussion of reporting requirements
set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder.
A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess
a tax, and under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting
requirement. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.
THE ABOVE SUMMARY IS NOT INTENDED TO
CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP,
AND DISPOSITION OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO
THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.
EXPERTS
Our consolidated financial
statements as of December 31, 2019 and 2018 have been incorporated by reference herein in reliance upon the report of BDO South
Africa Inc., independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.
Our consolidated financial
statements as of December 31, 2017 have been incorporated by reference herein in reliance upon the report of KPMG Inc., independent
registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters relating to the offering
of the Common Shares hereunder will be passed upon on our behalf by Mourant Ozannes (“Mourant”) with respect
to Jersey legal matters. Mourant’s Jersey office is located at 22 Grenville Street, St Helier, Jersey JE4 8PX, Channel Islands.
In addition, certain legal matters in connection with the Offering under this Prospectus Supplement will be passed upon on behalf
of the Agent by Bennett Jones LLP, as to Canadian legal matters, and by Ellenoff Grossman & Schole LLP, as to United States
legal matters.
AVAILABLE INFORMATION
We are a public company that files annual,
quarterly and special reports, proxy statements and other information with Canadian securities regulatory authorities and the SEC.
The documents we file with, or furnish to, the SEC are electronically available from the SEC’s EDGAR and may be accessed
at www.sec.gov.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the U.S. Securities and Exchange Commission (“SEC”)
is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 9, 2018
CALEDONIA MINING CORPORATION PLC
$30,000,000
Common Shares
Preference Shares
Units
Warrants to Purchase Shares
Caledonia Mining Corporation Plc (the “Company,” “Caledonia,”
“we,” “us” or “our”) may offer and issue from time to time (the “Offering”)
common shares (“Common Shares”) of our Company, preference shares (“Preference Shares” and
together with Common Shares “Shares”) of our Company, warrants to purchase Shares (“Warrants”)
and units consisting of Shares and whole or partial Warrants (“Units”, and together with the Common Shares,
the Preference Shares and the Warrants, the “Securities”) or any combination thereof for up to
an aggregate initial offering price of $30,000,000 (or the equivalent thereof in other currencies) during the 36 month period
that this short form base shelf prospectus (the “Prospectus”), including any amendments hereto, remains effective. Securities
may be offered separately or together, in amounts, at prices and on terms to be determined based on market conditions at the time
of sale as set forth in an accompanying prospectus supplement (a “Prospectus Supplement”).
The specific terms of the Securities with respect to a particular Offering will be set
out in the applicable Prospectus Supplement and may include, where applicable (i) in the case of Shares, the number of Shares
offered, the offering price, whether the Shares are being offered for cash, and any other terms specific to the Shares being offered,
(ii) in the case of Warrants, the offering price, whether the Warrants are being offered for cash, the designation, the number
and the terms of the Shares purchasable upon exercise of the Warrants, any procedures that will result in the adjustment of these
numbers, the exercise price, the dates and periods of exercise and any other terms specific to the Warrants being offered, and
(iii) in the case of Units, the number of Units offered, the offering price of the Units, the number, designation and terms
of the Shares and Warrants comprising the Units and any procedures that will result in the adjustment of those numbers and any
other specific terms applicable to the offering of Units. Where required by statute, regulation or policy, and where
Securities are offered in currencies other than United States dollars, appropriate disclosure of foreign exchange rates applicable
to the Securities will be included in the Prospectus Supplement describing the Securities.
All shelf information permitted under applicable law to be omitted from this Prospectus
will be contained in one or more Prospectus Supplements that will be delivered to purchasers together with this Prospectus.
This Prospectus constitutes a public offering of the Securities only in those jurisdictions
where they may be lawfully offered for sale and only by persons permitted to sell the Securities in those jurisdictions. We
may offer and sell Securities to, or through, underwriters or dealers and also may offer and sell certain Securities directly to
other purchasers or through agents pursuant to exemptions from registration or qualification under applicable securities laws. A
Prospectus Supplement relating to each issue of Securities offered thereby will set forth the names of any underwriters, dealers,
or agents involved in the Offering and sale of the Securities and will set forth the terms of the Offering of the Securities, the
method of distribution of the Securities including, to the extent applicable, the proceeds we will receive and any fees, discounts
or any other compensation payable to underwriters, dealers or agents and any other material terms of the plan of distribution.
The outstanding Common Shares are listed on the Toronto Stock Exchange (the “TSX”)
under the symbol “CAL” and the NYSE American (the “NYSE American”) under the symbol “CMCL”
and depositary interests in the Common Shares are admitted to trading on AIM of the London Stock Exchange (the “AIM”)
under the symbol “CMCL”. On May 8, 2018 (the last trading day prior to the date of this Prospectus), the
closing price of (a) the Common Shares on: (i) the TSX was CAD$11.57; and (ii) the NYSE American was $8.97; and (b) the depositary
interests in the Common Shares on AIM was £6.68. We will apply to have any Common Shares distributed under this
Prospectus listed on the TSX and the NYSE American and depositary interests representing them admitted to trading on AIM provided
those types of securities are currently listed or traded on such exchanges. Any listing and admission will be subject
to Caledonia fulfilling all of the listing requirements of the TSX and the NYSE American and the AIM Rules for Companies, respectively. Unless
otherwise specified in the applicable Prospectus Supplement, no Securities, other than Common Shares, will be listed or admitted
to trading on any securities exchange.
Our principal executive offices are located at 3rd Floor, Weighbridge House,
Weighbridge, St Helier, Jersey JE2 3NF (telephone +44 1534 679800).
Neither the SEC nor any state securities commission has approved or disapproved these
securities or passed upon the adequacy or accuracy of this Prospectus. Any representation to the contrary is a criminal offense.
Investing in the Securities involves a high degree of risk and must be considered
speculative due to the nature of our business and the present stage of exploration of our mineral properties. Prospective
purchasers of the Securities should carefully consider all the information in this Prospectus and in the documents incorporated
by reference in this Prospectus. See “Risk Factors” beginning on page 5 of this Prospectus.
You should rely only on the information contained in or incorporated by reference
into this Prospectus or any Prospectus Supplement. References to this “Prospectus” include documents incorporated
by reference therein. See “Documents Incorporated by Reference”. The information in or incorporated
by reference into this Prospectus is current only as of its date. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal to offer these Securities.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
Forward-looking Statements
This Prospectus, including the documents incorporated by reference herein, contains
forward-looking statements and forward-looking information (collectively, “forward-looking statements”) within
the meaning of United States securities laws relating to us that are based on the beliefs and estimates of our management as well
as assumptions made by and information currently available to us. Such forward-looking statements include, but are
not limited to statements concerning:
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the completion of the Offering;
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the use of proceeds of the Offering;
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our plans for our mineral properties;
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the future price of minerals;
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market events and conditions;
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the estimation of mineral reserves and mineral resources;
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estimates of the time and amount of future minerals production for specific operations;
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estimated future exploration expenditures and other expenses for specific operations;
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requirements for additional capital;
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currency fluctuations; and
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environmental risks and reclamation costs.
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When used in this Prospectus, any statements that express or involve discussions with
respect to predictions, beliefs, plans, projections, objectives, assumptions or future events of performance (often but not always
using words or phrases such as “anticipate”, “believe”, “estimate”, “expect”, “intend”,
“plan”, “strategy”, “goals”, “objectives”, “project”, “potential”
or variations thereof or stating that certain actions, events, or results “may”, “could”, “would”,
“might” or “will” be taken, occur, or be achieved, or the negative of any of these terms and similar expressions),
as they relate to us or our management, are intended to identify forward-looking statements.
Such forward-looking statements reflect our current views with respect to future events
and are subject to certain known and unknown risks, uncertainties and assumptions. Many factors could cause actual results,
performance, or achievements to be materially different from any future results, performance or achievements that may be expressed
or implied by such forward-looking statements, including, among others:
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risks relating to our ability to finance the exploration and development of our mineral properties;
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risks relating to our exploration of our mineral properties and business activities;
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risks and uncertainties relating to the interpretation of exploration results, geology, grade and continuity of our mineral deposits;
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risks related to differences between United States and Canadian practices for reporting mineral resources and reserves;
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risks related to title to our mineral properties and the ability to obtain the required mining leases and permits to develop our mineral properties;
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risks related to mining operations in Zimbabwe;
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commodity price fluctuations;
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risks related to the price and volume volatility of the Common Shares;
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risks related to governmental regulations, including environmental regulations and possible changes thereto;
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risks related to possible reclamation activities on our properties;
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our ability to attract and retain qualified management and our dependence upon such management in the development of our mineral properties and potential conflicts of interest involving such management;
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risks related to the ability to maintain the listing of the Common Shares on the TSX and NYSE American; and
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increased competition in the exploration industry.
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Should one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those described herein. This list is not exhaustive
of the factors that may affect any of our forward-looking statements. Forward-looking statements are statements about
the future and are inherently uncertain, and our actual achievements or other future events or conditions may differ materially
from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without
limitation, those referred to in this document under the heading “Risk Factors”, in the 20-F (as defined below) and
elsewhere. The forward-looking statements in this Prospectus are based on the reasonable beliefs, expectations and opinions
of management on the date the forward-looking statements are made, and, except as required by law, we do not assume any obligation
to update forward-looking statements if circumstances or our management’s beliefs, expectations or opinions should change.
For the reasons set forth above, investors should not attribute undue certainty to or
place undue reliance on forward-looking statements.
Additional risks and uncertainties relating to us and our business can be found in the
“Risk Factors” section of this Prospectus and in any applicable Prospectus Supplement, as well as in our other documents
incorporated by reference herein.
AVAILABLE INFORMATION
We file reports and other information with the securities commissions and similar regulatory
authorities in the provinces of Canada (collectively, the “Commissions”). These reports and information
are available to the public free of charge on SEDAR at www.sedar.com.
We have filed a registration statement on Form F-3 relating to the Securities with the
SEC (the “Registration Statement”). This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information contained in the Registration Statement, certain items of which are contained
in the exhibits to the Registration Statement as permitted by the rules and regulations of the SEC. Statements included
in this Prospectus or incorporated herein by reference about the contents of any contract, agreement or other documents referred
to are not necessarily complete, and in each instance investors should refer to the exhibits for a more complete description of
the matter involved. Each such statement is qualified in its entirety by such reference. Copies of the documents
incorporated herein by reference may be obtained on request, orally or in writing, without charge, from our Company Secretary at
3rd Floor, Weighbridge House, Weighbridge, St Helier, Jersey JE2 3NF (telephone +44 1534 679800).
We are subject to the information requirements of the U.S. Securities Exchange Act of
1934, as amended (the “U.S. Exchange Act”), relating to foreign private issuers and applicable Canadian
securities legislation and, in accordance therewith, file reports and other information with the SEC and securities regulatory
authorities in Canada. As a foreign private issuer, we are exempt from the rules under the U.S. Exchange Act prescribing
the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting
and short-swing profit recovery provisions contained in Section 16 of the U.S. Exchange Act.
Investors may read any document that we have filed with the SEC at the SEC’s public
reference room in Washington, D.C. Investors may also obtain copies of those documents from the public reference room
of the SEC at 100 F Street, N.E., Washington, D.C. 20549 by paying a fee. Investors should call the SEC at
1-800-SEC-0330 or access its website at www.sec.gov for further information about the public reference rooms. Investors
may read and download some of the documents we have filed with the SEC’s Electronic Data Gathering and Retrieval system at
www.sec.gov.
Readers should rely only on information contained or incorporated
by reference in this Prospectus and any applicable Prospectus Supplement. We have not authorized anyone to provide the
reader with different information. We are not making an offer of the Securities in any jurisdiction where the offer
is not permitted. Readers should not assume that the information contained in this Prospectus is accurate as of any
date other than the date on the front of this Prospectus, unless otherwise noted herein or as required by law. It should
be assumed that the information appearing in this Prospectus and the documents incorporated herein by reference are accurate only
as of their respective dates. Our business, financial condition, results of operations and prospects may have changed
since those dates.
DOCUMENTS INCORPORATED BY REFERENCE
Information has been incorporated by reference in this Prospectus from documents
filed with the Commissions and filed with, or furnished to, the SEC. Copies of the documents incorporated
herein by reference may be obtained on request without charge from our Company Secretary at 3rd Floor, Weighbridge House,
Weighbridge, St Helier, Jersey JE2 3NF (telephone +44 1534 679800). Copies of these documents are also available
through the Internet on the System for Electronic Document Analysis and Retrieval, which can be accessed online at www.sedar.com
and on the SEC’s Electronic Data Gathering and Retrieval System at www.sec.gov.
The following documents, which we filed or furnished with the Commissions and the SEC,
as applicable, are specifically incorporated by reference into, and form an integral part of, this Prospectus:
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(a)
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Our Form 20-F Annual Report for the year ended December 31, 2017 (the ?20-F?) filed with the SEC on April 2, 2018 (File
No. 001-38164);
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(b)
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Our management information circular for the annual general meeting of shareholders held on June 19, 2017 which was included
as Exhibit 99.2 to the Form 6-K filed with the SEC on May 23, 2017 (File No. 001-13345);
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(c)
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Our Form 8-A Registration Statement filed with the SEC on July 24, 2017 (File No. 001-13345);
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(d)
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Our Form 6-K Report of Foreign Issuer filed with the SEC on January 2, 2018 (File No. 001-38164);
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(e)
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Our Form 6-K Report of Foreign Issuer filed with the SEC on February 26, 2018 (File No. 001-38164);
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(f)
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Our Form 6-K Report of Foreign Issuer filed with the SEC on April 3, 2018 (File No. 001-38164);
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(g)
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Our Form 6-K Report of Foreign Issuer filed with the SEC on April 4, 2018 (File No. 001-38164); and
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(h)
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Our Form 6-K Report of Foreign Issuer filed with the SEC on April 9, 2018 (File No. 001-38164).
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In addition, this Prospectus shall also be deemed to incorporate by reference all subsequent
annual reports filed on Form 20-F, Form 40-F or Form 10-K, and all subsequent filings on Forms 10-Q and 8-K filed by
us pursuant to the U.S. Exchange Act prior to the termination of the Offering made by this Prospectus. We may incorporate
by reference into this Prospectus any Form 6-K that is submitted to the SEC after the date of the filing of the registration
statement of which this Prospectus forms a part and before the date of termination of this Offering. Any such Form 6-K
that we intend to so incorporate shall state in such form that it is being incorporated by reference into this Prospectus. The
documents incorporated or deemed to be incorporated herein by reference contain meaningful and material information relating to
us and the readers should review all information contained in this Prospectus and the documents incorporated or deemed to be incorporated
herein by reference.
A Prospectus Supplement containing the specific terms of an Offering of Securities and
other information relating to the Securities will be delivered to prospective purchasers of such Securities together with this
Prospectus and will be deemed to be incorporated into this Prospectus as of the date of such Prospectus Supplement only for the
purpose of the Offering of the Securities covered by that Prospectus Supplement.
Any statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for the purposes of this Prospectus, to the extent that a statement
contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded shall not constitute a part of this Prospectus,
except as so modified or superseded. The modifying or superseding statement need not state that it has modified or superseded
a prior statement or include any other information set forth in the document that it modifies or supersedes. The making
of such a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded
statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material
fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which
it was made.
RISK FACTORS
An investment in our Securities is highly speculative and subject to a number of known
and unknown risks. Only those persons who can bear the risk of the entire loss of their investment should purchase our
Securities. You should carefully consider the risk factors which are set forth in the 20-F and the other information
contained in this Prospectus, as updated by our subsequent filings under the U.S. Exchange Act, and the risk factors and other
information contained in any applicable Prospectus Supplement, before purchasing any of our Securities.
THE COMPANY
Corporate Information
We were incorporated, effective February 5, 1992, by the amalgamation
of three predecessor companies; we were registered at the time under the Canada Business Corporations Act.
Following the creation of Caledonia, our Common Shares were listed
for trading on the TSX and quoted on the NASDAQ small caps market. On October 16, 1998, we announced that NASDAQ would
no longer quote its securities for trading. Our stock then commenced trading on NASDAQ’s OTCQX. In June 2005,
depositary interests in Common Shares were admitted to trading on AIM of the London Stock Exchange under the ticker symbol “CMCL”.
Our TSX trading symbol is “CAL”. Effective October 10, 2011 Common Shares commenced trading in the United States
on the OTCQX under the ticker symbol CALVF.
Effective March 19, 2016, we re-domiciled from Canada to Jersey
using a legal process called “Continuance”. The Continuance had no effect on our listings on the TSX and trading on
AIM, or the trading facility on the OTCQX in the United States.
On June 26, 2017, following approval by shareholders at the annual
general meeting held on June 19, 2017, the Common Shares underwent an effective 5:1 reverse share split by way of a 100:1 share
consolidation, coupled with a share buyback of resulting fractions, followed by an immediate 1:20 share division.
On July 24, 2017, we announced that our shares would be listed on
the NYSE American under the ticker symbol “CMCL” and trading began on July 27, 2017. At the same time our trading facility
on the OTCQX was cancelled.
The addresses and telephone numbers of our
principal offices are:
Registered and Head Office
Caledonia Mining Corporation Plc
3rd Floor, Weighbridge House, St Helier
Jersey, Channel Islands
JE2 3NF
+44 1534 679 9800
African Office - South African Subsidiary
Caledonia Mining South Africa Proprietary Limited
4th Floor, 1 Quadrum office park
Johannesburg, Gauteng, 2198
South Africa
(27) 11 447 2499
Intercorporate Relationships
We have the following subsidiaries, all of
which are wholly-owned by the Company (unless otherwise indicated), of which we have the percentage ownership set forth below and
whose assets or revenues exceed 10% of our consolidated assets or revenues:
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Subsidiaries of the Company
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Country of Incorporation
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Percentage held by Company
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Caledonia Mining South Africa Proprietary Limited
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South Africa
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100
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Blanket Mine (1983) (Private) Limited(1)
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Zimbabwe
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49
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(1)
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Blanket Mine (1983) (Private) Limited, notwithstanding our 49% shareholding interest in it, is
consolidated for reporting purposes due to the indigenisation transaction described in the section entitled “THE BUSINESS”.
It does not have any subsidiary companies.
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THE BUSINESS
Background
Effective April 1, 2006 we purchased 100% of the issued shares of
the Zimbabwean company, Caledonia Holdings Zimbabwe (Private) Ltd (“CHZ”), which held the shares of Blanket
Mine (1983) (Private) Limited, the owner of the operating Blanket Mine. The purchase consideration was $1,000,000 and the
issuance to the vendor of 20,000,000 shares in our capital. Because we bought the shares of the company owning the Blanket
Mine it thereby acquired all of the assets of that company and assumed all of its liabilities.
Description of Our Business
Our activities are focused on Blanket Mine in Zimbabwe. Our
business during the past three completed fiscal years has been focused primarily on the expansion and operation of the Blanket
Mine and increasing gold production at Blanket Mine.
Generally, gold mining, development and exploration in Southern
Africa is not seasonal, except where heavy seasonal rainfall can affect surface mining or exploration.
Total gold production at Blanket Mine for 2017 was 56,135oz (2016:
50,351oz; 2015: 42,804 oz.; 2014: 41,771 oz.).
Indigenisation of Blanket Mine
During 2012, to comply with Zimbabwean law that required indigenous
Zimbabweans own at least 51% of Blanket Mine, CHZ entered into agreements to transfer a 51% ownership interest in Blanket Mine
whereby it did the following:
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sold a 16% interest to the National Indigenisation and Economic Empowerment Fund (“NIEEF”) for $11.74 million;
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sold a 15% interest to Fremiro Investments (Private) Limited (“Fremiro”), which is owned by indigenous Zimbabweans,
for $11.01 million;
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sold a 10% interest to Blanket Employee Trust Services (Private) Limited (“BETS”) for the benefit of present and
future managers and employees for $7.34 million. The shares in BETS are held by the Blanket Mine Employee Trust (the “Employee
Trust”) with Blanket Mine’s employees holding participation units in the Employee Trust; and
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donated a 10% ownership interest to the Gwanda Community Share Ownership Trust (“Community Trust”). In addition
Blanket Mine paid a non-refundable donation of $1 million to the Community Trust.
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We facilitated the vendor funding of these transactions which is
repaid by way of dividends from Blanket Mine. 80% of dividends declared by Blanket Mine are used to repay such loans and the remaining
20% unconditionally accrues to the respective indigenous shareholders.
Outstanding balances on the facilitation loans attract interest
at a rate of the lower of 7.25% per annum, payable quarterly, or 80% of Blanket Mine’s dividend in a quarter which is attributable
to indigenous shareholders. The timing of the repayment of the loans depends on the future financial performance of Blanket Mine
and the extent of future dividends declared by Blanket Mine.
Blanket Mine suspended dividend payments in December 2014 so that
it could fund the capital projects in terms of the Investment Plan (as described in the 20-F) and had a moratorium of interest
on the facilitation and advanced dividend loans from December 31, 2014 to July 31, 2016. Blanket Mine resumed dividend payments
on August 1, 2016 as a result of which the moratorium of interest on the facilitation and advance dividend loans ended.
The facilitation loans and interest were distributed by CHZ to our wholly-owned subsidiaries
and thereafter the majority of the loans and interest were distributed to us as dividends in specie.
Please refer to the headings “Business Overview” in the 20-F for a full description
of our business and in particular Blanket Mine.
MATERIAL CHANGES
Except as otherwise disclosed in this Prospectus there have been no material changes
to our operations that have occurred since December 31, 2017, and that have not been described in a report on Form 6-K furnished
under the U.S. Exchange Act and incorporated by reference into this Prospectus.
CONSOLIDATED CAPITALIZATION
The following table sets forth our capitalization and indebtedness as of December 31,
2017. This table should be read in conjunction with our audited consolidated financial statements for the years ended
December 31, 2017 and 2016 which are incorporated by reference into this Prospectus.
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($’000’s)
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As
at December 31
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2017
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Total non-current liabilities
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25,243
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Short term portion of term loan facility
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1,486
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Trade and other payables
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12,660
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Income taxes payable
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745
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Bank overdraft
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311
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Total current liabilities
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15,202
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Total liabilities
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40,445
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Total equity
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65,604
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Total equity and liabilities
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110,056
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There have been no material changes in our capitalization and indebtedness, on a consolidated
basis, since December 31, 2017.
DESCRIPTION OF SHARE CAPITAL
Our authorized share capital consists of an unlimited number of Common Shares with no
par value and an unlimited number of Preference Shares with no par value. There are no Preference Shares in issue.
The following table sets forth information about our share capital as of May 9, 2018:
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Number of Shares Authorized
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Unlimited
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Par Value per Share
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None
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Number of Shares Issued and Fully-Paid
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10,603,153 Common Shares
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Common Shares
The holders of the Common Shares are entitled to receive notice of all shareholder meetings
and to attend and vote at such meetings. Certificates representing the Common Shares are issued in registered form.
Registered shareholders are entitled to one vote for each Common Share held on all matters to be voted on by the shareholders. Each
Common Share is equal to every other Common Share and, subject to the rights of holders of shares ranking senior to the Common
Shares, if any, each Common Share is entitled to receive pro rata such dividends as may be declared by the board of directors out
of funds legally available therefore and to participate equally in the event of our liquidation, dissolution or winding up, whether
voluntary or involuntary, or any other distribution of our assets among the shareholders for the purpose of winding up our affairs
after we have paid out our liabilities. Common Shares are not subject to call or assessment. There are no
pre-emptive or conversion rights, and no provisions at this time for redemption, purchase or cancellation, surrender, sinking fund
or purchase fund. In addition, there are no provisions in our articles of association (“Articles”)
discriminating against any existing or prospective holders of such securities as a result of a shareholder owning a substantial
number of shares.
Preference Shares
Pursuant to Jersey law and our Memorandum of Association and the Articles, Preference
Shares may be issued from time to time in one or more series composed of such number of shares and with such preference, deferred
or other special rights, privileges, restrictions and conditions attached thereto as shall be fixed from time to time before issuance
by any resolution or resolutions providing for the issue of the shares of any series which may be passed by the directors and confirmed
and declared by special resolution of the shareholders. Subject to the rights, privileges, restrictions and conditions that may
be attached to a particular series of Preference Shares, the Preference Shares of each series shall (a) with respect to the payment
of dividends, be entitled to a preference over the Common Shares and over any other shares of the Company ranking junior to the
Preference Shares; and (b) on liquidation, dissolution or winding-up, be entitled to receive before distributions to holders of
Common Shares or shares ranking junior to the Preference Shares an amount equal to the price of the issue of the Preference Shares
together with any unpaid dividends. Subject to the rights, privileges, restrictions and conditions that may be attached to a particular
series of Preference Shares, except in the event of dissolution or disposal of substantially all of the business of the Company
the holders of Preference Shares shall not be entitled to receive notice of or to attend or vote at any meeting of the members
Company (apart from separate meetings of holders of Preference Shares).
Share Options
We also have 38,000 shares options outstanding. As of May 9, 2018, the following share
options to purchase Common Shares, granted by us under our Omnibus Equity Incentive Compensation Plan to our directors, officers,
employees and consultants were outstanding:
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Number
Outstanding(1)
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Exercise
Price
CAD$
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Expiry Date
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5,000
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4.00
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October 8, 2020
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18,000
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11.50
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October 8, 2021
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5,000
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8.10
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May 30, 2022
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5,000
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9.30(2)
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August 25, 2024
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5,000
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9.30(2)
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August 25, 2024
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38,000
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Notes:
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(1)
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Each share option is exercisable to purchase one Common Share.
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(2)
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The exercise price of CAD$9.30 per share was converted into a USD amount of $7.35 at the USD/CAD exchange
rate on the date of grant.
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Adjustments will be made in the exercise price and number of Common Shares deliverable
upon the exercise of the share options in the event of certain corporate transactions, such as share recapitalization, subdivision
or consolidation or if the outstanding Common Shares are changed into or exchanged for a different number of our shares or into
or for other securities issued by us or another entity, whether through an arrangement, amalgamation or other similar procedure
or otherwise.
Certain Jersey, Channel Islands Law Considerations
Purchase of Own Shares
As with declaring a dividend, we may not buy back or redeem our shares unless our directors
who are to authorize the buyback or redemption have made a statutory solvency statement that, immediately following the date on
which the buyback or redemption is proposed, the company will be able to discharge its liabilities as they fall due and, having
regard to prescribed factors, the company will be able to continue to carry on business and discharge its liabilities as they fall
due for the 12 months immediately following the date on which the buyback or redemption is proposed (or until the company is dissolved
on a solvent basis, if earlier).
If the above conditions are met, we may purchase shares in the manner described below.
We may purchase on a stock exchange our own fully paid shares pursuant to a special resolution
of our shareholders.
We may purchase our own fully paid shares otherwise than on a stock exchange pursuant
to a special resolution of our shareholders, but only if the purchase is made on the terms of a written purchase contract which
has been approved by an ordinary resolution of our shareholders. The shareholder from whom we propose to purchase or redeem shares
is not entitled to take part in such shareholder vote in respect of the shares to be purchased.
We may fund a redemption or purchase of our own shares from any source. We cannot purchase
our shares if, as a result of such purchase, only redeemable shares would remain in issue.
If authorized by a resolution of our shareholders, any shares that we redeem or purchase
may be held by us as treasury shares. Any shares held by us as treasury shares may be cancelled, sold, transferred for the purposes
of or under an employee share scheme or held without cancelling, selling or transferring them. Shares redeemed or purchased by
us are cancelled where we have not been authorized to hold these as treasury shares.
Mandatory Purchases and Acquisitions
The Companies (Jersey) Law 1991 (as amended) (the “Companies Law”)
provides that where a person has made an offer to acquire a class of all of our outstanding shares not already held by the person
and has as a result of such offer acquired or contractually agreed to acquire 90% or more of such outstanding shares, that person
is then entitled (and may be required) to acquire the remaining shares of such class. In such circumstances, a holder of any such
remaining shares may apply to the Jersey court for an order that the person making such offer not be entitled to purchase the holder’s
shares or that the person purchase the holder’s shares on terms different to those under which the person made such offer.
Other than as described above and below under “U.K. City Code on Takeovers
and Mergers”, we are not subject to any regulations under which a shareholder that acquires a certain level of share
ownership is then required to offer to purchase all of our remaining shares on the same terms as such shareholder’s prior
purchase.
Compromises and Arrangements
Where we and our creditors or shareholders or a class of either of them propose a compromise
or arrangement between us and our creditors or our shareholders or a class of either of them (as applicable), the Jersey court
may order a meeting of the creditors or class of creditors or of our shareholders or class of shareholders (as applicable) to be
called in such a manner as the court directs. Any compromise or arrangement approved by a majority in number representing 75% or
more in value of the creditors or 75% or more of the voting rights of shareholders or class of either of them (as applicable) if
sanctioned by the court, is binding upon us and all the creditors, shareholders or members of the specific class of either of them
(as applicable).
Whether the capital of the company is to be treated as being divided into a single or
multiple class(es) of shares is a matter to be determined by the court. The court may in its discretion treat a single class of
shares as multiple classes, or multiple classes of shares as a single class, for the purposes of the shareholder approval referred
to above taking into account all relevant circumstances, which may include circumstances other than the rights attaching to the
shares themselves.
U.K. City Code on Takeovers and Mergers
The U.K. City Code on Takeovers and Mergers, or the Takeover Code, applies, among other
things, to an offer for a company whose registered office is in the Channel Islands and whose securities are admitted to trading
on a regulated market or a multilateral trading facility in the United Kingdom or any stock exchange in the Channel Islands or
the Isle of Man (a “Code Company”). We are therefore a Code Company and are subject to the Takeover Code.
The Takeover Code provides a framework within which takeovers of companies subject to
it are conducted. In particular, the Takeover Code contains certain rules in respect of mandatory offers for Code Companies. Under
Rule 9 of the Takeover Code, if a person:
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•
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acquires an interest in shares of a Code Company that, when taken together with shares in which
persons acting in concert with such person are interested, carry 30% or more of the voting rights of the Code Company; or
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•
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who, together with persons acting in concert with such person, is interested in shares that in
the aggregate carry not less than 30% and not more than 50% of the voting rights in the Code, acquires additional interests in
shares that increase the percentage of shares carrying voting rights in which that person is interested,
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the acquirer, and, depending on the circumstances, its concert parties, would be required
(except with the consent of the Takeover Panel) to make a cash offer (or provide a cash alternative) for the Code Company’s
outstanding shares at a price not less than the highest price paid for any interests in the shares by the acquirer or its concert
parties during the previous 12 months.
Canadian takeover rules are also expected to apply to the Company unless Canadian shareholders
cease to hold at least 10% of the Company’s shares and the TSX is not the principal market for trading such shares. The Canadian
takeover rules are triggered when an acquiror crosses a bright-line 20% threshold ownership in a target company.
Rights of Minority Shareholders
Under article 141 of the Companies Law, a shareholder may apply to court for relief on
the grounds that the conduct of our affairs, including a proposed or actual act or omission by us, is “unfairly prejudicial”
to the interests of our shareholders generally or of some part of our shareholders, including at least the shareholder making the
application. What amounts to unfair prejudice is not defined in the Companies Law. There may also be common law personal actions
available to our shareholders.
Under article 143 of the Companies Law (which sets out the types of relief a court may
grant in relation to an action brought under article 141 of the Companies Law), the court may make an order regulating our affairs,
requiring us to refrain from doing or continuing to do an act complained of, authorizing civil proceedings and providing for the
purchase of shares by us or by any of our other shareholders.
Jersey Regulatory Matters
The Jersey Financial Services Commission, or JFSC, has given, and has not withdrawn,
its consent under Article 2 of the Control of Borrowing (Jersey) Order 1958 to the issue of Shares. The JFSC is protected by the
Control of Borrowing (Jersey) Law 1947 against any liability arising from the discharge of its functions under that law.
We have not yet sought the consent of the JFSC under Articles 2 or 4 (as applicable)
of the Control of Borrowing (Jersey) Order 1958 to the issue of any other Securities, but we may be required to do so before we
can issue any such Securities.
This document does not constitute a “prospectus” for the purposes of the
Companies (Jersey) Law 1991 as no invitation is made pursuant to it to the public to become a member of us or to acquire or apply
for any securities issued by us. However, such an invitation might be made pursuant to any Prospectus Supplement and, if it is,
we will need to deliver a copy of such Prospectus Supplement (together with this document) to the Jersey Registrar of Companies
in accordance with Article 5 of the Companies (General Provisions) (Jersey) Order 2002 and obtain from the Jersey Registrar of
Companies his consent to its circulation.
It must be distinctly understood that, in giving any such consents, neither the Jersey
Registrar of Companies nor the JFSC takes, or will take, any responsibility for our financial soundness or for the correctness
of any statements made, or opinions expressed, with regard to it. If you are in any doubt about the contents of this document or
any Prospectus Supplement, you should consult your stockbroker, bank manager, solicitor, accountant or other financial adviser.
The price of securities and the income from them can go down as well as up. Nothing in
this document or any Prospectus Supplement or anything communicated to holders or potential holders of any of our securities (or
interests in them) by or on our behalf is intended to constitute or should be construed as advice on the merits of the purchase
of or subscription for any securities (or interests in them) for the purposes of the Financial Services (Jersey) Law 1998.
Our directors have taken all reasonable care to ensure that the facts stated in this
document are true and accurate in all material respects, and that there are no other facts the omission of which would make misleading
any statement in the document, whether of facts or opinion. All of our directors accept responsibility accordingly.
USE OF PROCEEDS
Unless otherwise specified in a Prospectus Supplement, the net proceeds from the sale
of the Securities will be used for general corporate purposes, including funding working capital, potential future acquisitions
and capital expenditures. Each Prospectus Supplement will contain specific information concerning the use of proceeds from that
sale of Securities.
All expenses relating to an Offering of Securities and any compensation paid to underwriters,
dealers or agents, as the case may be, will be paid out of our general funds, unless otherwise stated in the applicable Prospectus
Supplement.
PLAN OF DISTRIBUTION
We may sell the Securities, separately or together, to or through underwriters or dealers
purchasing as principals for public offering and sale by them, and also may sell Securities to one or more other purchasers directly
or through agents. Each Prospectus Supplement will set forth the terms of the Offering, including the name or names
of any underwriters or agents, if any, the purchase price or prices of the Securities and the proceeds we will receive from the
sale of the Securities.
The Securities may be sold from time to time in one or more transactions at a fixed price
or prices which may be changed or at market prices prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices including sales in transactions that are deemed to be “at-the-market” distributions,
including sales made directly on the TSX, NYSE American or other existing trading markets for the securities. The prices
at which the Securities may be offered may vary as between purchasers and during the period of distribution. If, in
connection with the Offering of Securities at a fixed price or prices, the underwriters, if any, have made a bona fide effort to
sell all of the Securities at the initial offering price fixed in the applicable Prospectus Supplement, the public offering price
may be decreased and thereafter further changed, from time to time, to an amount not greater than the initial public offering price
fixed in such Prospectus Supplement, in which case the compensation realized by the underwriters will be decreased by the amount
that the aggregate price paid by purchasers for the Securities is less than the gross proceeds paid to us by the underwriters.
Underwriters, dealers and agents who participate in the distribution of the Securities
may be entitled under agreements to be entered into with us to indemnification by us against certain liabilities, including liabilities
under the Securities Act and Canadian, United Kingdom and Jersey securities legislation, or to contribution with respect to payments
which such underwriters, dealers or agents may be required to make in respect thereof. Such underwriters, dealers and agents may
be customers of, engage in transactions with, or perform services for, us in the ordinary course of business.
In connection with any Offering of Securities, except as otherwise set out in a Prospectus
Supplement relating to a particular Offering of Securities, the underwriters may over-allot or effect transactions intended to
maintain or stabilize the market price of the Securities offered at a level above that which might otherwise prevail in the open
market. Such transactions, if commenced, may be discontinued at any time.
DESCRIPTION OF SECURITIES
Shares
We may issue Common Shares and / or Preference Shares. Shares may be offered
separately or together with other Securities and may be attached to or separate from any other Securities. See “Description
of Share Capital” and “Governing Corporate Documents” for a description of the general terms that will apply
to any Shares issued pursuant to this Prospectus. The Shares to be issued in connection with any Offering hereunder
will be authorized by our board of directors (the “Board”) at such time as the Board determines to conduct an
Offering hereunder.
Warrants
We may issue Warrants to purchase Common Shares, Preference Shares or both. This
section describes the general terms that will apply to any Warrants issued pursuant to this Prospectus. Warrants may
be offered separately or together with other Securities and may be attached to or separate from any other Securities.
Each series of Warrants may be issued under a separate warrant indenture to be entered
into between us and one or more banks or trust companies acting as Warrant agent. The Warrant agent will act solely
as our agent and will not assume a relationship of agency with any holders of Warrant certificates or beneficial owners of Warrants.
The applicable Prospectus Supplement will include details of the warrant indentures,
if any, governing the Warrants being offered. The specific terms of the Warrants, and the extent to which the general
terms described in this section apply to those Warrants, will be set out in the applicable Prospectus Supplement. The
Prospectus Supplement relating to any Warrants we offer will describe the Warrants and the specific terms relating to the Offering. The
description will include, where applicable:
|
·
|
the designation and aggregate number of Warrants;
|
|
·
|
the price at which the Warrants will be offered;
|
|
·
|
the currency or currencies in which the Warrants will be offered;
|
|
·
|
the date on which the right to exercise the Warrants will commence and the date on which the right will expire;
|
|
·
|
the designation, number and terms of the Shares that may be purchased upon exercise of the Warrants, and the procedures that will result in the adjustment of those numbers;
|
|
·
|
the exercise price of the Warrants and any provisions for changes or adjustments in the exercise price;
|
|
·
|
the designation and terms of the Securities, if any, with which the Warrants will be offered, and the number of Warrants that will be offered with each Security;
|
|
·
|
if the Warrants are issued as a Unit with another Security, the date, if any, on and after which the Warrants and the other Security will be separately transferable;
|
|
·
|
any minimum or maximum amount of Warrants that may be exercised at any one time;
|
|
·
|
any terms, procedures and limitations relating to the transferability, exchange or exercise of the Warrants;
|
|
·
|
whether the Warrants will be subject to redemption or call and, if so, the terms of such redemption or call provisions;
|
|
·
|
as applicable, material United States and Canadian federal and United Kingdom income tax consequences of owning the Warrants; and
|
|
·
|
any other material terms or conditions of the Warrants.
|
Warrant certificates will be exchangeable for new Warrant certificates of different denominations
at the office indicated in the Prospectus Supplement. Prior to the exercise of their Warrants, holders of Warrants will
not have any of the rights of holders of Shares. We may amend the warrant indenture(s), if any, and the Warrants, without
the consent of the holders of the Warrants, to cure any ambiguity, to cure, correct or supplement any defective or inconsistent
provision, or in any other manner that will not prejudice the rights of the holders of outstanding Warrants, as a group.
Units
We may issue Units, which may consist of one or more Shares, Warrants or any combination
of Securities as is specified in the relevant Prospectus Supplement. In addition, the relevant Prospectus Supplement
relating to an Offering of Units will describe all material terms of any Units offered, including, as applicable:
|
·
|
the designation and aggregate number of Units being offered;
|
|
·
|
the price at which the Units will be offered;
|
|
·
|
the designation, number and terms of the Securities comprising the Units and any agreement governing the Units;
|
|
·
|
the date or dates, if any, on or after which the Securities comprising the Units will be transferable separately;
|
|
·
|
whether we will apply to list the Units on any exchange;
|
|
·
|
material income tax consequences of owning the Units, including how the purchase price paid for the Units will be allocated among the Securities comprising the Units; and
|
|
·
|
any other material terms or conditions of the Units.
|
TRADING PRICE AND VOLUME
The outstanding Common Shares are listed on the TSX under the symbol “CAL”
and on the NYSE American under the symbol “CMCL” and depositary interests representing the Common Shares are admitted
to trading on AIM under the symbol “CMCL”. Prior to July 27, 2017, the date of listing of the Common
Shares on the NYSE American, the Common Shares were traded on OTCQX under the symbols “CALVF” and “CALVD”.
The following tables set forth information relating to the trading of the Common Shares and depositary interests in the Common
Shares on the TSX, NYSE American (and OTCQX prior to that listing) and AIM respectively for the periods indicated. The Common Shares
underwent an effective 5:1 reverse share split on June 26, 2017.
TSX – CAL
|
Month
|
High
CAD$
|
Low
CAD$
|
Close
CAD$
|
Volume
|
|
2017
|
|
November
|
9.20
|
6.80
|
8.30
|
118,300
|
|
December
|
9.25
|
8.25
|
9.25
|
70,000
|
|
2018
|
|
January
|
9.45
|
8.82
|
9.29
|
62,600
|
|
February
|
9.40
|
8.69
|
9.25
|
111,400
|
|
March
|
9.35
|
8.87
|
8.87
|
74,100
|
|
April
|
12.50
|
9.05
|
12.23
|
227,400
|
NYSE American – CMCL
|
Month
|
High
$
|
Low
$
|
Close
$
|
Volume
|
|
2017
|
|
November
|
7.96
|
5.32
|
6.99
|
222,300
|
|
December
|
7.48
|
6.26
|
7.34
|
145,100
|
|
2018
|
|
January
|
7.70
|
7.25
|
7.44
|
143,500
|
|
February
|
7.58
|
6.80
|
7.20
|
145,000
|
|
March
|
7.26
|
6.91
|
6.91
|
112,600
|
|
April
|
9.90
|
7.09
|
9.63
|
315,600
|
AIM – CMCL
|
Month
|
High
GBP£
|
Low
GBP£
|
Close
GBP£
|
Volume
|
|
2017
|
|
November
|
5.10
|
4.10
|
5.05
|
54,616
|
|
December
|
5.10
|
5.00
|
5.10
|
30,348
|
|
2018
|
|
January
|
5.58
|
5.10
|
5.42
|
36,677
|
|
February
|
5.60
|
5.23
|
5.30
|
20,599
|
|
March
|
5.38
|
5.08
|
5.23
|
28,222
|
|
April
|
6.88
|
5.23
|
6.88
|
125,224
|
|
Financial Year Ended
|
High
|
Low
|
Close
|
|
TSX
CAD$
|
NYSE(1)/
OTCQX(2)
$
|
AIM
GBP£
|
TSX
CAD$
|
NYSE(1)/
OTCQX(2)
$
|
AIM
GBP£
|
TSX
CAD$
|
NYSE(1)/
OTCQX(2)
$
|
AIM
GBP£
|
|
December
31, 2017(3)
|
10.30
|
7.96
|
6.23
|
6.70
|
5.17
|
2.88
|
9.25
|
6.47
|
5.10
|
|
December 31, 2016
|
2.39
|
1.82
|
1.43
|
0.79
|
0.54
|
0.38
|
1.45
|
1.14
|
0.83
|
|
December 31, 2015
|
0.96
|
0.79
|
0.49
|
0.62
|
0.49
|
0.33
|
0.81
|
0.61
|
0.38
|
|
December 31, 2014
|
0.90
|
0.81
|
0.50
|
0.86
|
0.78
|
0.27
|
0.69
|
0.61
|
0.39
|
|
December 31, 2013
|
1.40
|
1.45
|
0.70
|
0.67
|
0.65
|
0.34
|
0.75
|
0.71
|
0.46
|
Notes:
|
|
(1)
|
From July 27, 2017, the date of listing of the Common Shares on the NYSE American.
|
|
|
(2)
|
Prior to July 27, 2017, the date of listing of the Common Shares on the NYSE American.
|
|
|
(3)
|
The Common Shares underwent an effective 5:1 reverse share split on June 26, 2017, with a commensurate
effect on the share price.
|
|
Quarterly
(Quarter Ended)
|
High
|
Low
|
Close
|
|
TSX
CAD$
|
NYSE(1)/
OTCQX(2)
$
|
AIM
GBP£
|
TSX
CAD$
|
NYSE(1)/
OTCQX(2)
$
|
AIM
GBP£
|
TSX
CAD$
|
NYSE(1)/
OTCQX(2)
$
|
AIM
GBP£
|
|
2018
|
|
First Quarter
|
10.85
|
8.65
|
6.00
|
6.71
|
5.23
|
4.15
|
8.87
|
6.91
|
5.22
|
|
2017
|
|
First Quarter
|
2.06
|
1.55
|
1.25
|
1.43
|
1.07
|
0.82
|
1.86
|
1.42
|
1.15
|
|
Second
Quarter(3)
|
9.90
|
7.35
|
5.88
|
7.70
|
5.60
|
2.88
|
8.46
|
6.28
|
4.85
|
|
Third Quarter
|
8.99
|
7.30
|
5.15
|
6.85
|
5.44
|
2.88
|
7.30
|
5.73
|
4.30
|
|
Fourth Quarter
|
9.25
|
7.96
|
5.10
|
6.70
|
5.17
|
4.23
|
9.25
|
7.39
|
5.10
|
|
2016
|
|
First Quarter
|
1.12
|
0.89
|
0.59
|
0.79
|
0.54
|
0.38
|
1.1
|
0.85
|
0.58
|
|
Second Quarter
|
1.40
|
1.09
|
0.74
|
1.05
|
0.79
|
0.57
|
1.25
|
0.97
|
0.73
|
|
Third Quarter
|
2.35
|
1.77
|
1.37
|
1.30
|
0.98
|
0.75
|
2.35
|
1.77
|
1.35
|
|
Fourth Quarter
|
2.39
|
1.82
|
1.43
|
1.28
|
0.96
|
0.77
|
1.45
|
1.14
|
0.83
|
Notes:
|
|
(1)
|
From July 27, 2017, the date of listing of the Common Shares on the NYSE American.
|
|
|
(2)
|
Prior to July 27, 2017, the date of listing of the Common Shares on the NYSE American.
|
|
|
(3)
|
The Common Shares underwent an effective 5:1 reverse share split on June 26, 2017, with a commensurate
effect on the share price.
|
PRIOR SALES
During the 12 month period prior to the date of this Prospectus, we have issued Common
Shares, or securities convertible into Common Shares, as follows:
|
Date Issued
|
Number of Securities Issued
|
Issuance/Exercise
Price Per Security
|
|
November 30, 2017
|
18,000 Common Shares(1)
|
CAD$4.50
|
|
October 6, 2017
|
27,080 Common Shares(1)
|
CAD$4.50
|
|
September 1, 2017
|
5,600 Common Shares(1)
|
CAD$4.50
|
|
August 21, 2017
|
600 Common Shares(1)
|
CAD$4.50
|
|
August 14, 2017
|
18,000 Common Shares(1)
|
CAD$4.50
|
|
May 30, 2017
|
25,000 Options(2)
|
CAD$1.62(2)
|
|
February 27, 2018
|
5,000 Options(3)
|
CAD$9.30
|
|
February 27, 2018
|
5,000 Options(3)
|
CAD$9.30
|
Notes:
|
|
(1)
|
Exercise of incentive stock options.
|
|
|
(2)
|
Grant of incentive stock options to a consultant. The number and price of these options were amended upon the occurrence of
the reverse share split (also referred to as the share consolidation) on June 26, 2017 to 5,000 and CAD$8.10 respectively
(i.e. at the same 5:1 effective rate).
|
|
|
(3)
|
Grant of incentive stock options to a consultant. The exercise price of CAD$9.30 per share was converted into a USD amount
of $7.35 at the USD/CAD exchange rate on the date of grant.
|
For the fiscal years ended December 31, 2015, 2016, and 2017 and the period from January
1, 2018 through May 9, 2018 we issued the following Common Shares:
|
Period
|
Nature of Share Issuance
|
Number of Common
Shares Issued
|
Gross Proceeds to
Company
|
|
|
|
|
|
|
Fiscal Year Ended
December 31, 2017
|
Exercise of Stock Options
|
69,280(1)
|
CAD$311,760
|
|
|
|
|
|
|
Fiscal Year Ended
December 31, 2016
|
Exercise of Stock Options
|
708,520(1)
|
CAD$573,168
|
|
|
|
|
|
|
Fiscal Year Ended
December 31, 2015
|
Exercise of Stock Options
|
Nil
|
Nil
|
Notes:
|
(1)
|
Issued pursuant to the exercise of stock options.
|
EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is a statement of the expenses (all of which are estimated), other than
any underwriting discounts and commissions and expenses reimbursed by us, if any, to be incurred in connection with a distribution
of an assumed amount of $30,000,000 of Securities under the Offering.
|
SEC registration fees
|
|
$
|
3,735
|
|
|
NYSE American Listing fees
|
|
|
(1
|
)
|
|
TSX Listing fees
|
|
|
(1
|
)
|
|
Printing Expenses
|
|
|
(1
|
)
|
|
Legal fees and expenses
|
|
|
(1
|
)
|
|
Accountants’ fees and expenses
|
|
|
(1
|
)
|
|
Transfer agent fees and expenses
|
|
|
(1
|
)
|
|
Miscellaneous
|
|
|
(1
|
)
|
|
Total
|
|
|
$
|
|
Notes:
|
(1)
|
To be provided by a Prospectus Supplement, or as an exhibit to a Report on Form 6-K that is incorporated by reference into this Prospectus.
|
GOVERNING CORPORATE DOCUMENTS
General Overview
As a result of the Continuance, we continued as a company under the Companies Law on
March 19, 2016, under incorporation number 120924. See “The Company”.
The following is a summary of certain provisions of our Articles and the Companies Law
applicable to us. Please note that this summary is not intended to be exhaustive and for further information please refer to the
full version of our Articles.
Director’s power to vote on a proposal, arrangement or contract
in which the director is materially interested.
An interested director must disclose to us the nature and extent of any interest
in a transaction with us, or one of our subsidiaries, which to a material extent conflicts or may conflict with our interests and
of which the director is aware. Failure to disclose an interest entitles us or a shareholder to apply to the court for an order
setting aside the transaction concerned and directing that the director account to us for any profit.
A transaction is not voidable and a director is not accountable notwithstanding a failure
to disclose an interest if the transaction is confirmed by special resolution and the nature and extent of the director’s
interest in the transaction are disclosed in reasonable detail in the notice calling the meeting at which the resolution is passed.
Although it may still order that a director account for any profit, a court will not
set aside a transaction unless it is satisfied that the interests of third parties who have acted in good faith would not thereby
be unfairly prejudiced and the transaction was not reasonable and fair in our interests at the time it was entered into.
Except as otherwise provided in the Articles and save in respect of a limited number
of instances as set out in the Articles, a director shall not vote on, or be counted in the quorum in relation to, any resolution
of the Board or of a committee of the Board concerning any matter in which he has to his knowledge, directly or indirectly, an
interest (other than his interest in shares or debentures or other securities of, or otherwise in or through, the Company) or duty
which (together with any interest of a person connected with him) is material and, if he shall do so, his vote shall not be counted.
Directors’ power, in the absence of an independent quorum, to vote
compensation to themselves or any members of their body.
The compensation of the directors is decided by the directors unless the board
of directors specifically requests approval of the compensation from the shareholders. If the issuance of compensation
to the directors is decided by the directors, a quorum is the majority of the directors in office. Our Articles do not
require that the compensation of any director be approved by disinterested directors.
We have a compensation committee which is currently composed of three independent
directors. The compensation committee makes recommendations to the Board with respect to compensation, including bonuses,
incentive stock options and securities of our directors and executive officers.
Borrowing powers exercisable by the directors and how such borrowing powers may
be varied.
The Board may exercise all our powers to borrow money, to guarantee, to indemnify and
to mortgage or charge all or any part of our undertaking, property and assets (present and future) and uncalled capital and, subject
to the Companies Law, to issue debentures and other securities, whether outright or as collateral security, for any debt, liability
or obligation of ours or of any third party.
The Board shall restrict our borrowings and exercise all voting and other rights
or powers of control exercisable by us in relation to its subsidiary undertakings (if any) so as to secure (but as regards subsidiary
undertakings only in so far as by the exercise of such rights or powers of control the Board can secure) that the aggregate principal
amount from time to time outstanding of all borrowings by our group (exclusive of borrowings owing by one member of our group to
another member of our group) shall not at any time without the previous sanction of an ordinary resolution of the Company exceed
an amount equal to three times the Adjusted Capital and Reserves (as defined in the Articles). The borrowing powers may be varied
by amendment to our Articles which requires approval of our shareholders by special resolution, being a resolution passed by at
least 2/3 majority of the votes cast on the resolution (a “Special Resolution”).
Retirement and non-retirement of directors under an age limit requirement.
There are no such provisions applicable to us under the Articles or the Companies
Law.
Number of Common Shares required for a director’s qualification.
Under our Articles, our directors are not required to hold any of our Common
Shares as qualification for service on the Board.
Alienability of Shares
Subject to such of the restrictions of the Articles as may be applicable, a
member may transfer all or any of his shares, in the case of shares held in certificated form, by an instrument of transfer executed
by or on behalf of the transferor in any usual form or in any other form which the Board may approve or, in the case of shares
held in uncertificated form, in accordance with the Uncertificated Securities (Jersey) Order 1999, as amended from time to time
and any provisions of or under the Companies Law which supplement or replace such Order and the system’s rules and otherwise
in such manner as the Board in its absolute discretion shall determine. Subject to the Companies Law, the transferor shall be deemed
to remain the holder of the share until the name of the transferee is entered in the Register in respect of it.
Changes to Rights and Restrictions of Common Shares
Any of the rights for the time being attached to any share or class of our shares (and
notwithstanding that we may be or be about to be in a winding up) may be varied or abrogated in such manner (if any) as may be
provided by such rights or, in the absence of any such provision, either with the consent in writing of the holders of not less
than two-thirds in number of the issued shares of the class or with the sanction of a Special Resolution passed at a separate general
meeting of the holders of shares of the class duly convened and held as provided in the Articles (but not otherwise).
Dividend Record
We paid our initial dividend in February 2012 of 6 Canadian cents. On April 4, 2013 we
announced an annual dividend in respect of the year to December 31, 2012 also of 6 Canadian cents. On November 25, 2013 we announced
that in 2014 we intended to pay an annual aggregate dividend of 6 Canadian cents per Common Share, payable on a quarterly basis.
The first quarterly dividend of 1.5 Canadian cents per Common Share was paid at the end of January 2014 and further quarterly dividends
were subsequently paid at the end of April, July, October in each year. In December 2015, we announced that with effect from the
results for the year to December 31, 2015 (which were released at the end of March 2016), it would report its financial results
in United States Dollars, instead of Canadian Dollars. Accordingly all dividends would also be declared in United States Dollars.
In January 2016, we announced that the dividend payable at the end of January 2016 would be 1.125 US cents and the quarterly dividend
policy was subsequently increased in the third quarter of 2016 from 1.125 US cents per share to 1.375 US cents per share, an increase
of 22%. In conjunction with the overall 1 for 5 share consolidation which became effective on June 26, 2017, we announced
on July 4, 2017 that we had made a commensurate adjustment to the dividend by increasing it fivefold.
Since 2013, we have paid dividends to shareholders totaling the equivalent of approximately
$1.78 per share (on a post share consolidation basis). It is expected that the dividend of twenty-seven and a half United States
cents per annum, paid in equal quarterly instalments, will be maintained.
In order to pay a dividend (or any distribution), the authorising directors must make
a statement that they have formed the opinion that we will be able to continue to pay our debts as they fall due, not just immediately
after payment but also for the subsequent 12 months or until we are wound up whichever is earlier.
Ownership of Securities and Change of Control
Save as set out below in respect of the imposition of restrictions for failure to disclose
interests in shares, there are no limitations on the rights of non-resident or foreign shareholders to hold or exercise voting
rights on the securities imposed by the laws of our jurisdiction of incorporation or by our constituent documents. See also “Exchange
Controls” below.
Any person who beneficially owns or controls, directly or indirectly, more than 10% of
our Common Shares is considered an insider and must file an insider report in Canada, within ten days of becoming an insider, disclosing
any direct or indirect beneficial ownership of, or control over direction over securities of our company. In addition,
if we hold any of our own securities, we must disclose such ownership.
Under the Exchange Act, all holders of 5% or greater of our share capital must report
their holdings to the SEC on “Schedule 13G” if the holdings are passive and held not with an intent to acquire control
and non-passive holders must report on “Schedule 13D”. Holdings should be calculated to include the holdings
of multiple parties which are affiliates or acting in concert with regards to a particular stock. Schedule 13G must be filed
within 10 days of acquiring 5% or greater and then updated for any changes each year within 45 days of the year end.
Under the AIM Rules for Companies, we must disclose, insofar as we have such information,
certain information concerning any relevant change (which means a move up or down through a whole percentage point at or above
3%) in a significant shareholder (which means any person with an interest in 3% or more of our share capital). Under our Articles,
and in accordance with guidance provided by the AIM Rules, our significant shareholders have an obligation to inform us of relevant
changes and should they not do so following the issue of a notice by us we may impose restrictions on the rights of those persons
similar to those described in the following paragraph.
Under our Articles, we may send a disclosure notice to any person whom we know or have
reasonable cause to believe is interested in our shares or to have been so interested at any time during the three years immediately
preceding the date on which the disclosure notice is issued. If the holder of, or any person appearing to be interested in, any
share has been served with a disclosure notice and is in default of complying with the disclosure notice, we may in certain circumstances
impose restrictions on the holder's voting rights and, where the holder is interested or appears to us to be interested in at least
0.25 per cent. of the issued shares of the relevant class, to also suspend dividend and transfer rights on that holder's shares.
There are no provisions in our Articles intended to delay, defer or prevent a change
in control of our Company. However, please see “U.K. City Code on takeovers and mergers” above.
Meetings of the Shareholders
Annual and Extraordinary General Meetings
Under our Articles, our annual general meeting is to be held once in each calendar year
and not more than 13 months after the previous meeting. Additionally, the Board may call a meeting of shareholders
at any time.
We must give shareholders not less than 21 clear days’ notice of any meeting of
the shareholders.
Despite any other provision of the Articles, we or the Board may fix any date as the
record date for any dividend, distribution, allotment or issue or for determining shareholders entitled to receive notice of and,
subject to the Uncertificated Securities (Jersey) Order 1999, to vote at any meeting of shareholders.
No business shall be transacted at any general meeting unless a quorum is present when
the meeting proceeds to business, but the absence of a quorum shall not preclude the choice or appointment of a chairman of the
meeting. Except as otherwise provided by the Articles, two members entitled to vote at the meeting present in person or by proxy
together holding or representing by proxy not less than five per cent. of the issued shares shall be a quorum for all purposes.
At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless before or on the
declaration of the result of the show of hands or on the withdrawal of any other demand for a poll a poll is duly demanded. Subject
to the Companies Law, a poll may be demanded by:
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the chairman of the meeting;
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at least five members or proxies entitled to vote on the resolution;
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any member or proxy alone or together with one or more others representing in aggregate at least
one-tenth of the total voting rights of all the members having the right to attend and vote on the resolution (excluding any voting
rights attached to any shares held as treasury shares); or
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any member or proxy alone or together with one or more others holding or having been appointed
in respect of shares conferring a right to vote on the resolution, being shares on which an aggregate sum has been paid up equal
to not less than one-tenth of the total sum paid up on all the shares conferring that right (excluding any voting rights attached
to any shares held as treasury shares).
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Unless a poll is so demanded and the demand is not withdrawn, a declaration by the chairman
of the meeting that a resolution has been carried or carried unanimously or by a particular majority or not carried by a particular
majority or lost and an entry to that effect in the minutes of the meeting shall be conclusive evidence of the fact without proof
of the number or proportion of the votes recorded in favour of or against such resolution.
Our board of directors is not separated into classes and there are no provisions which
provide for cumulative voting in the election of directors.
Differences from Requirements in the United States
Differences in Corporate Law
Set forth below is a comparison of certain shareholder rights and corporate governance
matters under Delaware law and Jersey law:
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Corporate Law Issue
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Delaware Law
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Jersey Law
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Special Meetings of Shareholders
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Shareholders generally do not have the right to call meetings of shareholders unless that right is granted in the certificate of incorporation or by-laws. However, if a corporation fails to hold its annual meeting within a period of 30 days after the date designated for the annual meeting, or if no date has been designated for a period of 13 months after its last annual meeting, the Delaware Court of Chancery may order a meeting to be held upon the application of a shareholder.
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Shareholders holding 10% or more of the company’s voting rights and entitled to
vote at the relevant meeting may legally require directors to call a meeting of shareholders. Under the Articles, the percentage
required to requisition a meeting is reduced to 5%.
The Jersey Financial Services Commission, or JFSC, may, at the request of any officer,
secretary or shareholder, call or direct the calling of an annual general meeting. Failure to call an annual general meeting in
accordance with the requirements of the Companies Law is a criminal offense on the part of a Jersey company and its directors and
secretary.
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Interested Director Transactions
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Interested director transactions are permissible and may not be legally voided if:
• either a majority of disinterested directors, or a majority in interest of holders
of shares of the corporation’s capital stock entitled to vote upon the matter, approves the transaction upon disclosure of
all material facts; or
• the transaction is determined to have been fair as to the corporation as of the
time it is authorized, approved or ratified by the board of directors, a committee thereof or the shareholders.
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An interested director must disclose to the company the nature and extent of any interest
in a transaction with the company, or one of its subsidiaries, which to a material extent conflicts or may conflict with the interests
of the company and of which the director is aware. Failure to disclose an interest entitles the company or a shareholder to apply
to the court for an order setting aside the transaction concerned and directing that the director account to the company for any
profit.
A transaction is not voidable and a director is not accountable notwithstanding a failure
to disclose an interest if the transaction is confirmed by special resolution and the nature and extent of the director’s
interest in the transaction are disclosed in reasonable detail in the notice calling the meeting at which the resolution is passed.
Although it may still order that a director account for any profit, a court will not
set aside a transaction unless it is satisfied that the interests of third parties who have acted in good faith would not thereby
be unfairly prejudiced and the transaction was not reasonable and fair in the interests of the company at the time it was entered
into.
The Articles set out a limited number of transactions and matters in which a director
may be interested and in which he may vote and be counted in the quorum in relation to a resolution on the matter.
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Cumulative Voting
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The certificate of incorporation of a Delaware corporation may provide that shareholders
of any class or classes or of any series may vote cumulatively either at all elections or at elections under specified circumstances.
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There are no provisions in the Companies Law relating to cumulative voting.
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Approval of Corporate Matters by Written Consent
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Unless otherwise specified in a corporation’s certificate of incorporation, shareholders
may take action permitted to be taken at an annual or special meeting, without a meeting, notice or a vote, if consents, in writing,
setting forth the action, are signed by shareholders with not less than the minimum number of votes that would be necessary to
authorize the action at a meeting. All consents must be dated and are only effective if the requisite signatures are collected
within 60 days of the earliest dated consent delivered.
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If permitted by the articles of association of a company, a written consent signed and
passed by the specified majority of members may affect any matter that otherwise may be brought before a shareholders’ meeting,
except for the removal of a company’s auditors. Such consent shall be deemed effective when the instrument, or the last of
several instruments, is signed by the specified majority of members or on such later date as is specified in the resolution.
The Articles do not contain provisions regarding shareholder resolutions in writing.
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Business Combinations
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With certain exceptions, a merger, consolidation or sale of all or substantially all
of the assets of a Delaware corporation must be approved by the board of directors and a majority of the outstanding shares entitled
to vote thereon.
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A sale or disposal of all or substantially all the assets of a Jersey company must be
approved by the board of directors and, only if the articles of association of the company require, by the shareholders in general
meeting. A merger involving a Jersey company must be generally documented in a merger agreement which must be approved by special
resolution of that company.
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Limitations on Director’s Liability and Indemnification of Directors and
Officers
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A Delaware corporation may indemnify a director or officer of the corporation against
expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in
defense of an action, suit or proceeding by reason of his or her position if (i) the director or officer acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect
to any criminal action or proceeding, the director or officer had no reasonable cause to believe his or her conduct was unlawful.
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The Companies Law does not contain any provision permitting Jersey companies to limit
the liabilities of directors for breach of fiduciary duty.
However, a Jersey company may exempt from liability, and indemnify directors and officers,
for liabilities:
• incurred in defending any civil or criminal legal proceedings where:
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the person is either acquitted or receives a judgment in their favor;
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where the proceedings are discontinued other than by reason of such person (or someone on their behalf) giving some benefit
or suffering some detriment; or
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where the proceedings are settled on terms that such person (or someone on their behalf) gives some benefit or suffers some
detriment but in the opinion of a majority of the disinterested directors, the person was substantially successful on the merits
in the person’s resistance to the proceedings;
• incurred to anyone other than to the company if the person acted in good faith
with a view to the best interests of the company;
• incurred in connection with an application made to the court for relief from liability
for negligence, default, breach of duty or breach of trust under Article 212 of the Companies Law in which relief is granted to
the person by the court; or
• incurred in a case in which the company normally maintains insurance for persons
other than directors.
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Appraisal Rights
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A shareholder of a Delaware corporation participating in certain major corporate transactions
may, under certain circumstances, be entitled to appraisal rights under which the shareholder may receive cash in the amount of
the fair value of the shares held by that shareholder (as determined by a court) in lieu of the consideration the shareholder would
otherwise receive in the transaction.
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There are no appraisal rights under the Companies Law but the Articles include dissent rights of shareholders, based on Canadian law, whereby shareholders who dissent to certain transactions of the Company may apply to have the Company buy their shares for fair value.
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Shareholder Suits
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Class actions and derivative actions generally are available to the shareholders of a
Delaware corporation for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with
applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys’ fees incurred
in connection with such action.
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Under Article 141 of the Companies Law, a shareholder may apply to court for relief on
the ground that the conduct of a company’s affairs, including a proposed or actual act or omission by a company, is “unfairly
prejudicial” to the interests of shareholders generally or of some part of shareholders, including at least the shareholder
making the application.
There may also be customary law personal actions available to shareholders. Under Article
143 of the Companies Law (which sets out the types of relief a court may grant in relation to an action brought under Article 141
of the Companies Law), the court may make an order regulating the affairs of a company, requiring a company to refrain from doing
or continuing to do an act complained of, authorizing civil proceedings and providing for the purchase of shares by a company or
by any of its other shareholders.
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Inspection of Books and Records
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All shareholders of a Delaware corporation have the right, upon written demand, to inspect
or obtain copies of the corporation’s shares ledger and its other books and records for any purpose reasonably related to
such person’s interest as a shareholder.
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The register of shareholders and books containing the minutes of general meetings or
of meetings of any class of shareholders of a Jersey company must during business hours be open to the inspection of a shareholder
of the company without charge. The register of directors and secretaries must during business hours (subject to such reasonable
restrictions as the company may by its articles of association or in general meeting impose, but so that not less than two hours
in each business day be allowed for inspection) be open to the inspection of a shareholder or director of the company without charge.
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Amendments to Charter
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Amendments to the certificate of incorporation of a Delaware corporation require the
affirmative vote of the holders of a majority of the outstanding shares entitled to vote thereon or such greater vote as is provided
for in the certificate of incorporation. A provision in the certificate of incorporation requiring the vote of a greater number
or proportion of the directors or of the holders of any class of shares than is required by Delaware corporate law may not be amended,
altered or repealed except by such greater vote.
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The memorandum of association and the articles of association of a Jersey company may only be amended by special resolution (being a two-thirds majority if the articles of association of the company do not specify a greater majority) passed by shareholders in general meeting or by written resolution signed by all the shareholders entitled to vote.
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MATERIAL CONTRACTS
There are no material contracts to which we are a party other than contracts entered
into in the ordinary course of business.
EXCHANGE CONTROLS
Jersey has no system of exchange controls. There are no Jersey law restrictions
specifically targeted to restrict the repatriation of capital or earnings of a Jersey public company to non-resident investors,
and there are no laws in Jersey or exchange restrictions specifically targeted to restrict the remittance of dividends, profits,
interest, royalties or other payments to non-resident holders of Common Shares.
There is no limitation imposed by the laws of Jersey or by our constituent documents
on the right of a non-resident to hold or vote the Common Shares.
INSPECTION OF DOCUMENTS
Copies of the documents referred to in this Prospectus, or in the Registration Statement,
may be inspected at our registered office at 3rd Floor, Weighbridge House, Weighbridge, St Helier, Jersey JE2 3NF during
normal business hours.
CERTAIN INCOME TAX CONSIDERATIONS
Material income tax consequences relating to the purchase, ownership and disposition
of any of the Securities offered by this Prospectus will be set forth in the applicable Prospectus Supplement relating to the Offering
of those Securities. You are urged to consult your own tax advisors prior to any acquisition of our Securities.
LEGAL MATTERS
Certain legal matters relating to the offering of Securities hereunder will be passed
upon on our behalf by Mourant Ozannes (“Mourant”) with respect to Jersey legal matters. Mourant’s
Jersey office is located at 22 Grenville Street, St Helier, Jersey JE4 8PX, Channel Islands.
INTEREST OF EXPERTS
To our knowledge, none of the experts named in this Prospectus held, at the time they
prepared or certified such statement, report or valuation, received after such time or will receive any registered or beneficial
interest, direct or indirect, in any securities or other property of our Company or one of our associates or affiliates otherwise
than by remuneration as employees or consultants of our business, none of which is contingent on the success of an offering of
the Securities.
AUDITORS, TRANSFER AGENT AND REGISTRAR
Our auditors are KPMG Inc., Chartered Accountants, 85 Empire Road, Parktown 2193, South
Africa, who provided an auditor’s report on our audited consolidated financial statements as at December 31, 2017 and December
31, 2016 and for each of the years in the three year period ended December 31, 2017. KPMG Inc.has advised us that they are
independent of our Company within the rules of professional conduct of the South African Institute of Chartered Accountants and
within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC and the Public Company Accounting
Oversight Board (United States).
The transfer agent and registrar for the Common Shares is Computershare Investor Services
Inc. of 100 University Ave, 8th Floor, Toronto, Ontario, M5J 2Y1.
CALEDONIA MINING CORPORATION PLC
Up to
$13,000,000
Common
Shares
PROSPECTUS
SUPPLEMENT
Cantor
July 23, 2020
Caledonia Mining (AMEX:CMCL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Caledonia Mining (AMEX:CMCL)
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From Apr 2023 to Apr 2024
