15 May 2018

Zimbabwe: Indigenisation Reversal - Canadian Miner Looks to Buy Out Zimbabwe Partners

Zimbabwe focussed gold miner Caledonia is looking to buy out its local partners as it capitalises on a liberalisation of the laws governing the mining sector.

Aim-listed and Canada-based Caledonia is "actively engaged" with two of the indigenous groups that own stakes in its Blanket gold mine as it looks to raise its ownership back above 49pc.

Steve Curtis, chief executive, said that the gold sector was no longer subject to onerous rules imposed by previous president Robert Mugabe, which had stipulated that foreign companies must sell down their holdings below 50pct to give indigenous groups a boost.

imbabwe-based gold miner Caledonia is looking to buy out its local partners as it capitalises on a liberalisation of the laws governing the mining sector.

Aim-listed Caledonia is "actively engaged" with two of the indigenous groups that own stakes in its Blanket gold mine as it looks to raise its ownership back above 49pct.

Steve Curtis, chief executive, said that the gold sector was no longer subject to onerous rules imposed by previous president Robert Mugabe, which had stipulated that foreign companies must sell down their holdings below 50pct to give indigenous groups a boost.

Curtis said there had been "significant mood changes" since Mugabe was deposed, with the government keen to promote the message that it is "open for business". Zimbabwe is due to hold elections in July.

Caledonia, one of the few listed companies with mines in Zimbabwe, has continued to invest despite the political upheaval. It has embarked on a five-year, $70m expansion programme of its Blanket mine, which will see it sink a new shaft and build a new gold mine below the existing one by 2021.

In the first quarter of this year, Caledonia's production rose 1pct while net profits jumped 35pct to $3.2m, boosted by higher gold prices.

Analysts at SP Angel said: "It is encouraging to hear of the improving climate for mining investment in Zimbabwe and that the investment programme at the Blanket mine remains on track."

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