REG - Caledonia Mining Crp - Transaction to sell solar plant

Caledonia MiningAnnouncement

01/10/2024 07:00

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RNS Number : 3465G  Caledonia Mining Corporation PLC  01 October 2024

Caledonia Mining Corporation Plc

 

Transaction to sell solar plant

 

(NYSE AMERICAN: CMCL; AIM: CMCL; VFEX: CMCL)

 

St Helier, October 1, 2024 - Caledonia Mining Corporation Plc ("Caledonia" or
"the Company") is pleased to announce that it has signed a conditional sale
agreement for the entire issued share capital of its Zimbabwe subsidiary,
Caledonia Mining Services (Private) Limited ("CMS"), which owns and operates
the 12.2MWac solar plant that supplies power to Blanket Mine. CMS is to be
sold to CrossBoundary Energy Holdings ("CBE") for $22.35 million, payable in
cash, and the power generation of the solar plant will continue to be sold to
Blanket Mine by way of a power purchase agreement.

 

Highlights

·    Upon completion of the sale, Caledonia will realise a profit on the
$14.3 million construction cost by selling the plant for $22.35 million.

·     Completion of the sale will return capital to Caledonia at a key
moment in the Company's growth trajectory.

·   Caledonia will retain the exclusive energy off take, ensuring
approximately a fifth of Blanket Mine's daily electricity requirement
continues to be met by renewable power.

·   CBE has been invited to tender for an expansion of the solar plant to
deliver further renewable energy to Blanket Mine.

 

The construction of the solar plant was initially financed by a registered
offering of Caledonia's shares in the US in 2020 and this raised $13 million
through the issue of 597,963 shares.

Since commissioning in February 2023, the solar plant has generated over
47,350Mwh of power, and profits attributable to the solar plant for the year
ended December 31, 2023 were $728,023. The power generated from the solar
plant has significantly reduced the use of diesel generators and grid power at
Blanket Mine, ensuring approximately a fifth of the mine's daily electricity
needs are met by solar power. The plant will continue to supply Blanket Mine
under an exclusive power purchase agreement.

The sales consideration will be reinvested in Caledonia's other projects that
are expected to yield a higher return to our shareholders and will have the
added benefit of focussing management's attention on our core business of gold
mining and exploration.

CrossBoundary Energy is a leading developer, owner and operator of distributed
renewable energy solutions for businesses across Africa, providing cheaper and
cleaner energy through power purchase and lease agreements. CBE provides
tailored, fully financed renewable energy solutions to its corporate customers
allowing them to avoid upfront capital expenditure and technical risks, whilst
still benefitting from cheaper, cleaner, and more reliable power. Through
close collaboration with its partners, CBE provides renewable energy solutions
that adapt to the needs of their clients including designing, building,
financing, and maintaining renewable energy installations.

CBE was launched by the CrossBoundary Group, a mission-driven investment firm,
in 2015 as Sub-Saharan Africa's first provider of fully financed
commercial-industrial solar solutions. It currently operates in over fourteen
African countries and has a large portfolio of renewable energy infrastructure
projects across the continent. In addition to mining, CBE's clients include
leading local manufacturers and multinational corporations such as Diageo,
Heineken, and Unilever. Completion of the purchase is subject to various
conditions precedent, including obtaining local regulatory approvals and the
installation of some upgraded equipment, which are anticipated to take a few
months to satisfy.

 

Commenting on the announcement, Mark Learmonth, Chief Executive Officer, said:

 

"We are pleased to have signed this agreement to sell the solar plant which,
upon completion, will enable us to redeploy capital to our core business of
mining.

 

"Whilst the sale will generate an immediate profit for the Company, more
importantly we have identified an experienced partner in CBE which brings vast
expertise in delivering and running renewable energy projects.

 

"We look forward to developing a strong relationship with CBE - we are already
working with them to deliver a meaningful extension to the plant, and we will
be considering renewable energy solutions at our other development projects in
due course."

 

Matthew Tilleard, Managing Partner at CrossBoundary Energy, said:

 

"CrossBoundary Energy's mission is to provide affordable, clean power
solutions to underserved markets, and we achieve this by deploying capital
into energy projects that enable businesses to focus on their core operations.
Our partnership with Caledonia demonstrates the efficacy of this model for the
mining sector, benefiting the mine's operations and ultimately enabling
sustainable mining. We look forward to pursuing these acquisitions with miners
across the continent."

 

 

 

 Caledonia Mining Corporation Plc

 Mark Learmonth                                              Tel: +44 1534 679 800

 Camilla Horsfall                                            Tel: +44 7817 841 793
 Cavendish Capital Markets Limited (Nomad and Joint Broker)

 Adrian Hadden                                               Tel: +44 207 397 1965

 Pearl Kellie                                                Tel: +44 131 220 9775
 Panmure Liberum (Joint Broker)

 Scott Mathieson/ Matt Hogg                                  Tel: +44 20 3100 2000
 Camarco, Financial PR (UK)

 Gordon Poole                                                Tel: +44 20 3757 4980

 Julia Tilley

 Elfie Kent
 3PPB (Financial PR, North America)

 Patrick Chidley                                             Tel: +1 917 991 7701

 Paul Durham                                                 Tel: +1 203 940 2538
 Curate Public Relations (Zimbabwe)

 Debra Tatenda                                               Tel: +263 77802131

 IH Securities (Private) Limited (VFEX Sponsor - Zimbabwe)

 Lloyd Mlotshwa                                              Tel: +263 (242) 745 119/33/39

Note: The information contained within this announcement is deemed by the
Company to constitute inside information under the Market Abuse Regulation
(EU) No. 596/2014 ("MAR") as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 and is disclosed in accordance with the
Company's obligations under Article 17 of MAR.

 

 

Cautionary Note Concerning Forward-Looking Information

Information and statements contained in this news release that are not
historical facts are "forward-looking information" within the meaning of
applicable securities legislation that involve risks and uncertainties
relating, but not limited, to Caledonia's current expectations, intentions,
plans, and beliefs.  Forward-looking information can often be identified by
forward-looking words such as "anticipate", "believe", "expect", "goal",
"plan", "target", "intend", "estimate", "could", "should", "may" and "will" or
the negative of these terms or similar words suggesting future outcomes, or
other expectations, beliefs, plans, objectives, assumptions, intentions or
statements about future events or performance. Examples of forward-looking
information in this news release include: the satisfaction of conditions
precedent in connection with the sale agreement and the completion of the
sale, the continued supply and sale of power under the power purchase
agreement, any increase in the size of the solar power plant and the
development of new plants at other projects.  The forward-looking information
contained in this news release is based, in part, on assumptions and factors
that may change or prove to be incorrect, thus causing actual results,
performance or achievements to be materially different from those expressed or
implied by forward-looking information.  Such factors and assumptions
include, but are not limited to: the establishment of estimated resources and
reserves, the grade and recovery of minerals which are mined varying from
estimates, success of future exploration and drilling programs, reliability of
drilling, sampling and assay data, the representativeness of mineralization
being accurate, success of planned metallurgical test-work, capital
availability and accuracy of estimated operating costs, obtaining required
governmental, environmental or other project approvals, inflation, changes in
exchange rates, fluctuations in commodity prices, delays in the development of
projects, the assessment of the existing capital intensity of the Bilboes gold
project and Caledonia's experience of project development in Zimbabwe and
other factors.

 

Security holders, potential security holders and other prospective investors
should be aware that these statements are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to differ
materially from those suggested by the forward-looking statements.  Such
factors include, but are not limited to: risks relating to the completion of
the sale, risks relating to estimates of mineral reserves and mineral
resources proving to be inaccurate, fluctuations in gold price, risks and
hazards associated with the business of mineral exploration, development and
mining, risks relating to the credit worthiness or financial condition of
suppliers, refiners and other parties with whom the Company does business;
inadequate insurance, or inability to obtain insurance, to cover these risks
and hazards, employee relations; relationships with and claims by local
communities and indigenous populations; political risk; risks related to
natural disasters, terrorism, civil unrest, public health concerns (including
health epidemics or outbreaks of communicable diseases such as the coronavirus
(COVID-19)); availability and increasing costs associated with mining inputs
and labour; the speculative nature of mineral exploration and development,
including the risks of obtaining or maintaining necessary licenses and
permits, diminishing quantities or grades of mineral reserves as mining
occurs; global financial condition, the actual results of current exploration
activities, changes to conclusions of economic evaluations, and changes in
project parameters to deal with unanticipated economic or other factors, risks
of increased capital and operating costs, environmental, safety or regulatory
risks, expropriation, the Company's title to properties including ownership
thereof, increased competition in the mining industry for properties,
equipment, qualified personnel and their costs, risks relating to the
uncertainty of timing of events including targeted production rate increase
and currency fluctuations.  Security holders, potential security holders and
other prospective investors are cautioned not to place undue reliance on
forward-looking information.  By its nature, forward-looking information
involves numerous assumptions, inherent risks and uncertainties, both general
and specific, that contribute to the possibility that the predictions,
forecasts, projections and various future events will not occur.  Caledonia
undertakes no obligation to update publicly or otherwise revise any
forward-looking information whether as a result of new information, future
events or other such factors which affect this information, except as required
by law.

 

This news release is not an offer of the shares of Caledonia for sale in the
United States or elsewhere. This news release shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be any sale of
the shares of Caledonia, in any province, state or jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such province, state or
jurisdiction.

 

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