Caledonia Mining (TSX: CAL; NYSE: CMCL) agreed to buy a 15 percent stake in Fremiro Investments at the Blanket Gold Blanket in Zimbabwe, worth $ 16.6 million. At the end of the transaction, Caledonia will have 64% of the brand.
Under the terms of the agreement, both companies will cancel Fremir's loans of $ 11.46 million for a loan from Caledonia. Caledonia will then issue Fremiro 727,266 shares worth USD 7.15 per share, the final Caledonia share price at New York Stock Exchange On August 17, 2018, Fremiro will then own 6.42% of the diluted capital of Caledonia.
Caledonia produced nearly 14,000 oz. Gold on Blanket in the third quarter of 2018
Caledonia produced nearly 14,000 oz. gold at Blanket in the third quarter of 2018, 3% in the same quarter of the previous year, but by 10% more than in the second quarter of 2018. The company produced 39,559 oz. gold in the first three quarters of 2018, slightly less than in the first three quarters of 2017.
As a result, the company has reduced its production guidelines in 2018 from 55,000 to 59,000 oz. gold at 54,000 to 56,000 oz. gold. He writes that he remains on the right track to reach the target goal of 2021 or so. 80,000 oz. gold.
The company says that lower-than-expected instructions, coupled with the weak gold price, forced them to reduce their adjusted earnings in the direction from 1.65 USD to 1.90 USD per share to 1.40 USD for USD 1.50 per share. The Revised Earnings Guideline is 3 to 12 percent higher than the company's earnings in 2017.
In April 2006 Caledonia purchased the Blanket mine from Kinross Gold (TSX: K; NYSE: KGC). Its interest rate has fallen to 49% in terms of domain in 2012, which has sold 51% of its interests to local people in Zimbabwe, including Fremier. Fremiro could not afford interest, so Caledonia lent him money.
Caledonia Mining shares are currently trading at $ 7.19 with a 52-week range from $ 6.80 to $ 12.50. The company has a market capitalization of $ 72 million.