Update re Indigenisation (9922D)
May 24 2012 - 2:01AM
UK Regulatory
TIDMCMCL
RNS Number : 9922D
Caledonia Mining Corporation
24 May 2012
Indigenisation update: Transfer of a further 20% of Blanket Mine
to Indigenous parties
Toronto, Ontario May 24, 2012: Caledonia Mining Corporation
("Caledonia" or the "Company") (TSX: CAL, OTCQX: CALVF, AIM: CMCL)
is pleased to announce that two further agreements have been signed
in respect of the transfer of 20% of the Blanket Mine in Zimbabwe
("Blanket") to two Indigenous Zimbabwean Trusts. These agreements
have been made in accordance with the Memorandum of Understanding
("MoU"), which was signed with the Government of Zimbabwe on
February 20, 2012, which is acknowledged by its signatories as
being a binding agreement, and pursuant to which Indigenous
Zimbabweans will acquire an effective 51% ownership of the Blanket
Mine for a paid transactional value of US$30.09 million.
An agreement has been signed for the sale of 10% of Blanket for
a consideration of US$7.339 million to The Blanket Mine Employee
Trust; a trust that has been established for the benefit of the
present and future managers and employees of Blanket.
A second agreement has been signed for the donation of 10% of
Blanket to the Gwanda Community Share Ownership Trust, a trust that
has been established for the benefit of the local community.
Pursuant to the terms of the MoU, Blanket will now make a
non-refundable donation of US$1.0 million to this trust.
These two agreements are in addition to the agreement for the
sale of 15% ownership of Blanket to a consortium of Indigenous
Zimbabweans for a consideration of US$11.0 million, which the
Company announced on May 10, 2012.
Caledonia has submitted an agreement regarding the last
remaining indigenisation transaction being the sale of a 16%
interest to the National Indigenisation and Economic Empowerment
Fund.
Caledonia will facilitate the vendor funding of all the sale
transactions which will be repaid by way of future dividends from
Blanket. Outstanding balances on these facilitation loans will
attract interest at a rate of 10% over the 12-month LIBOR. The
timing for the repayment of the facilitation loans will depend on
the future financial performance of Blanket. Caledonia expects to
redeploy the sale consideration in its projects.
Completion of these sale agreements is subject to several
conditions precedent which include certain approvals from the
Reserve Bank of Zimbabwe and Caledonia receiving confirmation from
the Government of Zimbabwe that full implementation of the terms of
the MoU constitutes compliance by Blanket and Caledonia with the
requirements of the Indigenisation Act.
Further announcements will be made when appropriate.
Blanket's unaudited revenues and profit after tax for the year
to December 31, 2011 were US$56.6 million and US$19.2 million
respectively.
For more information, please contact:
Caledonia Mining Corporation Canaccord Genuity Limited
Mark Learmonth John Prior / Sebastian Jones
Tel: + 27 11 447 2499 Tel: + 44 20 7523 8350
marklearmonth@caledoniamining.com
Newgate Threadneedle CHF Investor Relations
Beth Harris / Josh Royston Stephanie Fitzgerald
Tel: +44 20 7653 9850 Tel : +1 416 868 1079 x 222
stephanie@chfir.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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