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Caledonia Mining signs MoU to buy 15% stake in Blanket mine for US$16.6mln
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12:07 24 Aug 2018
Caledonia said it remains on track to achieve its production target of 80,000 ounces by 2021 at the Blanket mine
Caledonia Mining Corp PLC (LON:CMCL) has entered into a memorandum of understanding with Fremiro Investments (Private) Limited to buy a 15% stake in the Blanket mine in Zimbabwe for US$16.6mln.
Following the completion of the acquisition, Caledonia’s ownership in the mine would increase to 64%.

The deal comes after the Zimbabwean government amended its Indigenisation and Economic Empowerment Act in March to pave the way for more foreign investment in mining.
The indigenisation law gave Zimbabweans the right to take over and control many foreign-owned companies operating in the nation.

To comply with the law, Caledonia sold 41% of Blanket Mine to indigenous Zimbabwean shareholders in 2012, including a 15% stake to Fremiro, 16% to the National Indigenisation and Economic Empowerment Fund and 10% to Blanket Employee Trust Services Limited.
Caledonia now intends to buy back the stake it had sold to Fremiro after the Zimbabwean government removed the indigenisation requirement for gold mining businesses.
The acquisition is subject to regulatory approvals in Zimbabwe and a formal agreement with Fremiro.
"Blanket is well-advanced on implementing the investment programme which commenced in early 2015 and is expected to result in Blanket achieving an annual production rate of at least 80,000 ounces per annum by 2021, at a low cash cost,” said chief executive Steve Curtis.
“Caledonia is evaluating further investment opportunities in Zimbabwe. Such new opportunities, if they result in one or more transactions, are likely to be held directly by Caledonia and/or its subsidiaries rather than by Blanket.”
READ: Caledonia Mining grows gold output marginally in challenging quarter
Caledonia said it remains on track to achieve its production target of 80,000 ounces by 2021 at the Blanket mine. The miner also expects its cash position to improve as it reduces its operating costs and plans to maintain a quarterly dividend of 6.875 cents.

I remember back in 2013/14 we were all confident POG would be saved and shareholders wouldn't suffer. We watched the share price slide from the 300-400p range down to 20p before the management announced the rights terms and this then slid back to 5p. I hate to take losses as much as the next man but how can anyone think holding this is a good idea in light of IRC's well known predicament. The rights issue was also well known and shareholders were taken for a ride. Better to steer clear of this and have a good nights sleep. Good luck all

Well I averaged down this morning after waiting too long! Thought we might dip below 900 this week but looks like the USD has topped out for now. So this has become my largest holding followed by BHP and SLP.

Dividend paid yesterday. I'd estimate the currency swing should benefit Dewhurst to the tune of around £1.5m given the 8% decline in Sterling since 31st March. Trading update may next week may shed some light on general trading performance and expect people to jump in for the larger final dividend in January

I wonder how secure Mulberry's finances are after what happened with HoF.

The £2.4m hit is just the tip of the iceberg and only covers what was owed by HoF. Mulberry will suffer as HOF close stores, reducing footfall across Mulberry concessions. There are 31 HOF stores that will close and Mulberry along with other high street brands will suffer.

“While the company does sell online, Mulberry retail strategy depends on the physical journey of shopping in upmarket retail concessions, which means that its fortunes can rise (and fall) with the likes of House of Fraser,” said Artjom Hatsaturjants, research analyst at Accendo Markets.

He added: “And until Mulberry can decouple its business model from reliance on department store concessions (or trading conditions markedly improve), its share price will maintain its downward momentum below the already miserable -58% performance it’s seen since the beginning of the year.”

The same could be said for many of the chain’s other luxury brands like Ted Baker PLC (LON:TED), Hugo Boss and Giorgio Armani.

Fashion brands are also having to contend with a tough UK retail market due to weaker consumer confidence and online competition. Retailers were already struggling and will continue to do so but luxury brands which depend on department store concessions will continue to lose market share as their presence on the high street reduces.

No green shoots in this sector for the foreseeable future IMO

I have it written down as the last week of October but it may be my timescales are out. Have you got a link handy to verify ex dividend dates?

Hi ragnarlothbrok, long time no speak! Have been following the discussion with your good self and Visitor over the months, the shared research is much appreciated! Pleased to hear the IC are still covering SLP, bullish about the price of Rhodium. Points well made concerning the basket weighting of Platinum and Rhodium, still it's disappointing to see precious metals taking a 'hammering' and suspect that may infect investor morale in the coming months if it persists. On the other hand, like you say speculators may be more inclined to corner tight supply commodities like lithium or rhodium given the uncertainty in the markets and pursuit of protectionist policies. I think the USD will top out at some point in the next 3-6 months having already run rampant over the yuan, rouble, Euro and now Lira amongst other minor currencies. The destabilising of world trade through tariffs should serve to increase global inflation and that will feed into commodities at a later date, although who knows when. Might then we see precious metals soar?

Surprised to see SLP rising so much in one day given commodity weakness. If the current trend continues and platinum and palladium continue to fall in line with other metals are we to believe SLP will continue to appreciate in value on the basis that the risk here is much lowers (huge cash pile, low AISC etc..)? To me that kind of logic makes sense, especially if we see one of the majors go under. Lonmin are on borrowed time and Impala's margins must be pretty bad now. Any other ideas as to why buying demand is higher today?

Think this could hit 300p by Christmas

Looks extremely risky and on the verge of delisting. Made about £43k net profit in the first half but the last update was horrendous! The company has had it's supply restricted and "will be significantly reduced". That is unlikely to be a quick fix.

DWHT is up 30% in the past 10 days, something is driving demand, A shares have barely moved 10% off their low.

I think the Pound could fall to new lows against the Dollar and Euro in the next 6-12 months as we crash out the EU and Theresa May is forced to call a General Election. Couple that increased tariffs into the EU and a general cool down in UK markets which may feed into the retail sector and it's the makings of political and economic meltdown.

I agree with this broadly speaking, but the thing to remember is Trump is acting on a very short time-frame where as China have a president for life, Russia too pretty much and the EU are led by a closed club of bureaucrats scratching their own backs. I can't see a recession coming but a period of inflation, rising rates and choppy markets. When Trump leaves office which is surely going to happen next time around, some of the decisions he made will be reversed

one to watch, think this offers an attractive entry

£90k loss after tax discounting the £640k one-off impairment whilst disappointing is hardly a reason to sell at this level. The group expect further growth and reduced losses in the year ahead as the business in Malaysia continues to grow whilst the MiTP business in Bangladesh requires more investment (albeit less than initial costs). The Interim performance has already finished and those details will be released in mid September. Between now and then it would surprise me if we get to buy MBO shares at the 4p level giving the amount of cash retained and likely to rise in the foreseeable future. I think we were all expecting 6p+ but the impairment came out of the blue. Hopefully the cash build will have continued in the first six months of MBO's 2018 Financial Year

Liberum note is a total joke. Wait until July and watch for the correction in the next few weeks! As ragnar mentioned the basket price is solid thanks to Rhodium. Expect more headaches concerning Lonmin which may spill over into other South African PM miners like Impala who will also be struggling in the current environment. Sibanye have a tough road ahead if LMI falls under their control. Thankfully SLP are a solid little earner and the board have a proven strategy taking the share price from the 5-6p level a few years ago to current levels.

Wideyed - are you referring to the recent update? I'm not sure if they indicated the profit figure, revenue was mentioned at $130m. Also this falls comes despite a $40m+ cash raise to acquire businesses which were supposed to be income generating on acquisition. So discounting their presence the fall in revenue would have been greater, correct? Whichbingo more recently will affect future HY and FY results however it is a little disconcerting to see the company effectively 'treading water' hence the short term negativity boiling over. I might be wrong but it justifies exodus of capital the like of which has been seen here. With that said, I would expect a correction in the second or third week of July in anticipation of the trading statement.

Agreed, that was my attempt at sarcasm. Last I heard from Jolly he was predicting a market correction which may explain his absence on the boards now. I haven't been invested in MXP for years now so wouldn't like to comment on their current operations, GGP doing well and expecting KRS to jump out of second gear in the not so distant future ;)

How can one man(iac) reap so much harm on so many!? This trade war escalation is purely of his own making and causing havoc on the markets which affects not only millions of investors but also the hundreds of millions whose livelihoods and job security relies on flexible trade terms. Take Platinum, the price depreciation we are seeing is going to cause job losses and if not potentially wage freezes and no doubt that will lead to mass protests and potentially another Marikana. Anyone else share the view he alone is causing markets to tumble and prices to slide?

nero120 the share price is now the lowest it's been in more than 2 years and most here agree the situation will get worse before it gets better. There is no reason to sell of course if you think this will all blow over in a couple of month. I don't hold any shares but I know this is an attractive price historically speaking so if the government reestablishes control I'll buy in. At the moment it feels to me like Ortega is heading the way of Zuma, only his entire government may fall and not by democratic process either. I won't be surprised to see a military coup or military backed move against the government. Difficult to say if Condor will suffer as a result but permits aren't coming any time soon.