Toronto Stock Exchange-listed Caledonia Mining Corporation, is seeking to raise US$13 million for the installation of a solar power plant for Blanket Mine in Zimbabwe.
The plan is part of the mining concerns strategy to beat power cuts that has dogged the mining industry largely for the past two years due to depressed local generation.
It is also in sync with Government's strategy to boost tapping into green and cost effective energy.
In a press statement released last Friday, the mining concern said it had signed an agreement under which it will consider disposing shares worth US$13 million on the NYSE for the Blanket solar project.
"Caledonia Mining Corporation Plc ("Caledonia" or the "Company") today (Friday 24 July) announces that it has entered into an "At the Market" or "ATM" sales agreement with Cantor Fitzgerald &Co ("Cantor") (the "ATM Sales Agreement"), pursuant to which the Company may, at its discretion from time to time, sell up to US$13m worth of shares," said the miner.
"Any sales of shares would occur by means of ordinary brokers' transactions or block trades, with sales only being made on the NYSE American at market prices.
These new shares will be issued and allotted from time to time to settle any sales conducted under the ATM Sales Agreement.
"Caledonia expects to use the amount of any net proceeds from the sales for investment in the construction of a solar power plant to supply electricity to Blanket Mine in Zimbabwe," reads the press release.
Last year, Caledonia CEO, Steve Curtis, had said the miner was looking at investing in a Solar PV plant, which could supply Blanket's base load demand during peak sunlight hours.
This was as a result of incessant power outages back then.
As a stop gap measure Blanket Mine was relying on a back-up generator with about 12, 5 megawatts (MW).
At 12, 5MW, the generator had the capability to run the entire mine at full capacity.
They had also invested in another 6 MW diesel generator to guarantee power supply.
Meanwhile Caledonia described its Blanket Mine production performance in the last quarter as an outstanding achievement, with gold output rising 6,2 percent at 13,499 ounces in the three months ended June 30, 2020.
It marked production for the first half of 2020 at 27,732 ounces, up 12,5 percent versus the same period last year.
"The production of 13,499 ounces in the second quarter is an outstanding achievement given the challenges faced during the quarter as a result of the COVID-19 Pandemic," Caledonia Steve Curtis, chief executive said in a statement.
Curtis added: "For production to be 12,5 percent ahead of the corresponding 2019 level at the half-year stage leaves us well placed for the full year and on track to meet our full-year guidance of 53,000 to 56,000 ounces. This strong performance and high gold prices have ensured that the business remains on a very solid foundation as we prepare for the next phase of our growth with the completion of the central shaft in 2020 and increased production to 80,000 ounces by 2022."
Meanwhile, the miner is still expecting to close the year with its forecast production output of between 53,000 to 56,000 ounces.
By 2022, production is expected to have reached 80,000 ounces.