Caledonia bumps up VFEX windfall to US$8m
CALEDONIA Mining Corporation yesterday increased its target of funds for a planned listing on the Victoria Falls Stock Exchange (VFEX) to US$8 million after a positive response from Zimbabwean investors, chief executive officer Steve Curtis has said.
The firm, which holds majority control in Blanket Mine, will list on December 2, 2021.
In a shareholder update, Curtis said massive interest had boosted his board’s belief that joining southern Africa’s newest exchange would produce a range of positive spin-offs.
However, Curtis yesterday said an additional US$3 million would be raised.
“Caledonia is delighted to announce that in respect of its Victoria Falls Stock Exchange listing, due to extremely positive Zimbabwe investor response, Caledonia has decided to raise more funds than originally anticipated and, therefore, to issue more shares,” Curtis said in market update.
“At the offer price of US$12,64 per depositary receipt, Caledonia expects to issue approximately 630 000 new shares, raising approximately US$7,96 million (before expenses).
“The proceeds of the offer will be used for general corporate purposes in Zimbabwe,” he added.
The Jersey-headquartered outfit hopes to leverage on the forex-indexed VFEX to raise funding for its ambitious expansion in Zimbabwe, where it has set sights on purchasing new goldfields, after expanding production at Blanket Mine.
“The support from Zimbabwe investors has been extremely encouraging and reinforces our belief that this listing is an important milestone, welcoming new shareholders, with a mutual desire for investment in Zimbabwe and who have not, until now, been able to participate in Caledonia’s growth journey,” Curtis said.
“The VFEX listing will also enable Caledonia to progress with its next phase of development.
“The access to 100% USD revenue for incremental gold sales will assist Blanket Mine, and any other new mine Caledonia develops, and will attract investors who are confident that Zimbabwe is a competitive investment environment capable of delivering attractive returns.
“The anticipated listing highlights our continued commitment to Zimbabwe. We are excited about this next stage,” he added.
After enduring a listing drought since establishment in October last year, VFEX has recently been the subject of listing plans by several resource firms.
Last week, the Zimbabwe Stock Exchange-listed Bindura Nickel Corporation (BNC) said it would switch to the VFEX, giving impetus its growth ambitions.
The delisting, tentatively set for December 15 will bring to an end BNC’s 50-year relationship with the ZSE, having joined the bourse during the Rhodesian era in 1971.
BNC chairperson Muchadeyi Masunda sees the plan as a crucial step towards bolstering Zimbabwe’s plan to transform the mining industry into a US$12 billion economy by 2023.
Zimbabwe’s mines currently generate about US$3 billion annually.
The BNC boss spelt out his vision for the VFEX in papers sent to shareholders, rallying them to give the nod to the transaction during an extraordinary general meeting slated for December 13.
He said apart from its ability to raise foreign currency, special fiscal and monetary incentives extended to VFEX would unlock shareholder value.
“Your company is evaluating several projects which could be viable but would require substantial capital to be raised in foreign currency,” Masunda said.