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Caledonia Mining Corporation said it is in talks to acquire assets that would expand its gold mining operations in Zimbabwe.
- Toronto-based Caledonia Mining Corporation is interested in suspended gold mines in Zimbabwe.
- It is analyzing both private and public mines.
- The acquisitions could help Caledonia increase its annual production more than eight times.
Caledonia Mining Corporation said it is in talks to acquire assets that would expand its gold mining operations in Zimbabwe.
The Toronto-based gold producer is targeting both private assets and suspended state-owned mines, according to spokesman Maurice Mason. He declined to name the companies Caledonia was talking to, but said the miner expects to make an announcement on at least one of the assets by the end of this year.
The acquisitions could help Caledonia increase its annual production more than eight times to half a million ounces, as the company considers investing $ 400 million in Zimbabwe over the next decade. Zimbabwe is struggling to attract investors as it struggles with food and fuel shortages amid an offensive against political opponents by President Emmerson Mnangagwa.
“Obviously, there is a risk, but we think some of those risks are undervalued by the market,” Mason said. “Zimbabwe offers a good return for an acceptable risk.”
While Zimbabwe’s gold production has declined, Caledonia has increased production at its Blanket mine in the southwest of the country. The company needs larger assets and sees potential in some of the mines closed in the 1980s due to a lack of capital, Mason said.
Caledonia agreed to evaluate the gold assets of the state-owned Zimbabwe Mining Development Corporation, pending possible purchases. Mason said mining investors are concerned about existing obligations to sell their gold to the nation’s central bank, and Caledonia would be interested in discussing alternative deals on new investments.
“Zimbabwe is very attractive geologically and we are serious about growing our operations in the country,” Mason said. “The government says they are committed to helping us with the regulatory framework there, but looking specifically at state assets.”