SEATTLE (Scrap Monster): Caledonia Mining Corporation announced that it has signed an agreement to purchase Bilboes Gold Limited, the parent company which owns the Bilboes gold project in Zimbabwe. The $53 million shares deal in addition to royalty on revenues is expected to more than double the miner’s annual output, thus making it the country’s top miner.
The transaction is subject to Bilbeos Holdings receiving confirmation from Zimbabwean authorities that it will be allowed to export gold directly and retain the proceeds of the sale in U.S. dollar rather than converting them into local currency. In addition, the Zimbabwean authorities are also required to ensure availability of a sufficiently reliable and affordable electricity supply for the project now and in future.
Caledonia Mining announced that it plans to conduct its own feasibility study in order to identify the most judicious way to commercialize the project. It will consider phased development of the project, which in turn would minimize the initial capital investment and reduce the need for third party funding.
The company will enter into a tribute arrangement with Bilbeos Holdings so as to restart the oxide operations so as to ensure returning to profitable operations within a period of six months.
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