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Metals explorer Caledonia Mining Corporation (LSE:CMCL) disclosed an increase in gold production as well as gold recovery from its Blanket Mine in Zimbabwe, partially offsetting the decline in average realised gold price, during the second quarter of the 2012.
In a statement, Caledonia said it sold 11,560 ounces of gold for the April to June period, or 26% higher than the first quarter, and 41% more during the same period last year.
Revenue reached CAD$18.6 million, compared to CAD$11.9 million the year before, resulting in a pre-tax profit of CAD$8.2 million over CAD$4.8 million in 2011.
Indigenisation Programme
The move to transfer 51% ownership of the Blanket Mine is also nearing its completion, with all transaction documents signed and awaiting final approval from the Reserve Bank of Zimbabwe, Caledonia stated.
It can be recalled back in February 2012 that Caledonia Mining signed a Memorandum of Understanding with the Minister of the Youth, Development, Indigenisation and Empowerment of the Government of Zimbabwe to sell 51% interest in the Blanket mine for US$30.09 million.
The deal is in line with the Indigenisation Programme in the country, in accordance with the Indigenisation and Economic Empowerment Act, a law that required 51% equity of all commercial enterprises in Zimbabwe to be owned by its citizens.
On 21st June 2012, the remaining 16% stake in the Blanket mine has been sold to the National Indigenisation and Economic Empowerment Fund for US$11.742 million. The 15% interest in the said mine was sold for US$11.008 million to an investment company representing indigenous Zimbabweans in May 2012.
The Blanket Mine Employee Trust, with the present and future managers and employees of the mine as beneficiaries, received the 10% ownership of the mine for US$7.339 million.
Another trust, Gwanda Community Share Ownership Trust, received the 10% interest plus a US$1 million non-refundable donation, deducted from the Caledonia’s gross profit in the second quarter.
CEO Comments:
Stefan Hayden, President and Chief Executive Officer of Caledonia Mining, issued this statement regarding the second quarter results:
“The strong operating performance is a testament to the hard work of the management and employees at Blanket and shows the benefits of Caledonia’s recent investments in the Blanket Mine.”
On the indigenisation, he commented:
“Once indigenisation has been fully implemented, Blanket, as a profitable and cash-generative gold producer, will be well-positioned to take advantage of opportunities that exist for further growth.”
Company Spotlight
Caledonia Mining Corporation is a mining and exploration company with a producing gold mine in Zimbabwe, cobalt-copper project in Zambia, and platinum-nickel exploration project in South Africa.
The company was incorporated in Canada and is listed on the Toronto Stock Exchange, the Alternative Investment Market of the London Stock Exchange, and the Nasdaq-OTCBB under the symbols, “CAL”, “CMCL”, and “CALVF”, respectively.
