Caledonia raises US$10m within hours

Zim Now Writer

Gold miner Caledonia Mining Corporation on Friday surpassed its US10 fundraiser after raising US$10.6 million just hours after announcing the process that is targeted at strengthening the firm’s balance sheet as well as provide working capital for the company.

Caledonia had announced its plans to raise about £8.1 million (US$10 million) pursuant to a placing of new common shares of no par value at a price per Placing Share of £11.15 (US$13.74).

A further trade update said that the US$10 million had been raised.

“Caledonia Mining Corporation Plc (“Caledonia” or the “Company”) is pleased to announce that, further to the announcement made at 7.05am today regarding the Fundraise, it has raised, subject to certain conditions, approximately £8,7 million (approximately US$10,6 million) before expenses under the Placing.

“The Placing received strong support from new and existing institutional investors. As announced in the Launch Announcement, it is expected that the Zimbabwe Placing will remain open until 12.00pm on 31 March 2023 and a further announcement will be made in respect thereof in due course,” said the Victoria Falls Stock Exchange listed entity.

The gold miner said a total of 781 749 Placing Shares have been placed.

The net proceeds of the fundraise, together with the company’s existing cash reserves and the future cash to be generated from its ownership of the producing and cash generative Blanket Mine and from the Bilboes oxide operation, will strengthen its balance sheet and provide working capital flexibility to accelerate planned work at the three new gold projects it Caledonia is currently undertaking in Zimbabwe.

Caledonia Chief Executive Officer, Mark Learmonth said: “This modest fundraise allows us to accelerate progress on our very attractive package of exploration and development assets in Zimbabwe. In addition, I am pleased to see a range of institutional investors who support Caledonia’s long-term vision join the share register.”

The accelerated book-building process, through which the placing is being conducted in the UK and South Africa, is being managed by Cenkos Securities plc, Liberum Capital Limited, and The Standard Bank of South Africa Limited.

On the other hand, in Zimbabwe, leading equities firm, IH Securities (Private) Limited is undertaking, on behalf of the company, a placing in Zimbabwe Depositary Receipts to raise approximately £2,4 million which is approximately US$3 million at the placing price.

Caledonia noted that an application will be made to VFEX for the ZDRs to be admitted to trading, adding that it is expected that admission to trading on the US dollar-denominated bourse will become effective and that dealings in the ZDRs will commence on or no later than April 7 this year.

“The Zimbabwe Placing is conditional upon, inter alia, VFEX Admission taking place by no later than 8.00AM on April 7 2023 (or such later date as IH Securities may agree in writing with the Company, being not later than 8.00am on April 12, 2023).

“IH Securities and the Company reserve the right to accept over-subscriptions for ZDRs and to determine the maximum number of ZDRs that will be issued in the Zimbabwe Placing. The ZDRs have not been made available to the public and have not been offered or sold in any jurisdiction where it would be unlawful to do so,” said the mining entity.

The firm said, of the funds raised, approximately US$2 million of the net proceeds are anticipated to be used to fund a new feasibility study to investigate commercialisation of Bilboes, possibly through a phased development approach.

If this is successful, it would reduce the initial capital investment and also reduce the need for third party funding.

A further US$2 million is expected to go towards the procurement of a management facility at Bulawayo, which will be used to provide shared services for Blanket Mine and also for the projects at both Bilboes and Motapa.