Caledonia Mining Corporation Plc (“Caledonia” or the
“Company”) (NYSE AMERICAN: CMCL; AIM: CMCL) is pleased to
announce that it has entered into an option agreement which gives
the Company the exclusive right to explore and subsequently, if
exploration is successful and at its sole discretion, acquire the
mining claims over the area known as Glen Hume (“Glen Hume”), a
property situated in the Gweru mining district in the Zimbabwe
Midlands that has historically produced significant quantities of
gold.
Caledonia believes that Glen Hume offers
significant exploration potential. The agreement covers an area of
approximately 350 hectares with substantial evidence of gold
mineralisation including historical mining activity. Caledonia has
conducted airborne geophysics which indicates attractive
exploration targets and has also conducted preliminary
metallurgical work indicating favourable grade and recovery. A
preliminary contract has been signed with the existing drilling
contractor and a drill programme has been put in place.
Caledonia has acquired the right to explore the
area for a period of up to 15 months and subsequently, if
exploration is successful and at its sole discretion, acquire the
mining claims over the area. The total consideration is an initial
payment of $2.5 million in cash, followed by a further payment of
$2.5 million (payable in cash or shares at the discretion of the
vendor) which would be payable should Caledonia decide to exercise
its right to acquire the mining claims.
Caledonia has agreed to the payment of a one per
cent net smelter royalty (“NSR”) to the vendor on gold it produces
from the area. The NSR can subsequently be bought out at
Caledonia’s discretion for a lump sum payment of $15 million within
the first five years following the acquisition by Caledonia of the
claims, or $10 million until the tenth anniversary of operation or
$5 million thereafter.
Commenting on the announcement, Steve Curtis,
Chief Executive Officer, said:
“As we approach the completion of the Central
Shaft, our production is expected to increase by 45 per cent to
80,000 ounces by 2022, we also expect to realise a substantial
increase in cashflow as a result of increased production, reduced
costs per ounce and lower capital expenditure. This gives us the
financial and management capacity to take on new opportunities in
Zimbabwe and we are pleased to enter into this option agreement
which give us the right to explore and subsequently to acquire
mining claims over this property.
“This agreement represents the first step
towards our goal of increasing our portfolio and becoming a
multi-asset gold producer in Zimbabwe, one of the last gold
frontiers in Africa.”
For further information please contact:
Caledonia Mining Corporation PlcMark
LearmonthCamilla Horsfall |
Tel: +44 1534 679 802Tel: +44 7817 841793 |
|
|
WH IrelandAdrian
Hadden/James Sinclair-Ford |
Tel: +44 20 7220 1751 |
|
|
BlytheweighTim
Blythe/Megan Ray |
Tel: +44 207 138 3204 |
|
|
3PPBPatrick
ChidleyPaul Durham |
Tel: +1 917 991 7701Tel: +1 203
940 2538 |
Note: This announcement contains inside
information which is disclosed in accordance with the Market Abuse
Regulation (EU) No.
596/2014.
Cautionary Note Concerning
Forward-Looking InformationInformation and statements
contained in this news release that are not historical facts are
"forward-looking information", "financial outlooks" or "future
oriented financial information" (collectively, "forward-looking
information") within the meaning of applicable securities
legislation that involve risks and uncertainties relating, but not
limited, to Caledonia's 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 news release include:
production guidance, estimates of future/targeted production rates,
and our plans and timing regarding further exploration and drilling
and development, construction plans, financial and shareholders
returns on investment projects. 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 resources and 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, capital and operating costs
varying significantly from estimates, delays in obtaining or
failures to obtain required governmental, environmental or other
project approvals, inflation, changes in exchange rates,
fluctuations in commodity prices, delays in the development of
projects, the completion of construction projects, the proposed
benefits from construction projects and other factors.
To the extent any forward-looking information
herein constitutes a financial outlook or future oriented financial
information, any such statement is made as of the date hereof
and included herein to provide prospective investors with an
understanding of the Company's plans and assumptions. Security
holders, potential security holders and other prospective investors
are cautioned that such information may not be appropriate for
other purposes and 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 and mineral resources proving to be inaccurate,
fluctuations in gold price, risks and hazards associated with the
business of mineral exploration, development and mining, risks
relating to the credit worthiness or financial condition of
suppliers, refiners, contractors and other parties with whom the
Company does business; 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 (COVID-19)); availability and
increasing costs associated with mining inputs and labour; 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
unanticipated economic or other factors, risks of increased capital
and operating costs, environmental, safety or regulatory risks,
expropriation, the Company's 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, construction activity and currency
fluctuations. Security holders, potential security holders and
other prospective investors are cautioned that the assumptions used
in the preparation of such forward-looking information, although
considered reasonable at the time of preparation, may prove to be
imprecise and, accordingly, they should not place undue reliance on
such 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. Caledonia undertakes 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.
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