CALEDONIA Mining Corporation Plc has entered into an unconditional agreement with a leading renewable energy developer to sell its 12,2 megawatt solar power plant at Blanket Mine in Gwanda to the tune of US$22,35 million
Last November, Caledonia, a Jersey incorporated entity and also listed on the Victoria Falls Stock Exchange, announced that it had received an offer from a global solar operator to buy the solar plant at Blanket Mine and the buyer will exclusively supply the mine with electricity on a take-or-pay basis.
This results in Blanket securing some of its future power supply.
Caledonia, which is seeking to consolidate its strategy of becoming a multi-asset gold producer by acquiring several lucrative mining assets, in an update yesterday announced that it has entered into a sale agreement with CrossBoundary Energy (CBE) for the disposal of the 12,2MW.
CBE is a leading developer, owner and operator of distributed renewable energy solutions for businesses across Africa, providing cheaper and cleaner energy through power purchase and lease agreements.
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“The company is pleased to announce that it has signed a conditional sale agreement for the entire issued share capital of its Zimbabwe subsidiary, Caledonia Mining Services (Private) Limited (CMS), which owns and operates the 12,2MW solar plant that supplies power to Blanket Mine.
“CMS is to be sold to CBE for US$22,35 million, payable in cash, and the power generation of the solar plant will continue to be sold to Blanket Mine by way of a power purchase agreement,” it said.
“Caledonia will retain the exclusive energy offtake, ensuring approximately a fifth of Blanket Mine’s daily electricity requirement continues to be met by renewable power.”
Caledonia chief executive officer Mr Mark Learmonth, said: “We are pleased to have signed this agreement to sell the solar plant which, upon completion, will enable us to redeploy capital to our core business of mining.
“Whilst the sale will generate an immediate profit for the company, more importantly we have identified an experienced partner in CBE, which brings vast expertise in delivering and running renewable energy projects.”
He said they are looking forward to developing a strong relationship with CBE — already the two parties are working together to deliver a meaningful extension to the solar plant.
“And we will be considering renewable energy solutions at our other development projects in due course.”
CBE managing partner Mr Matthew Tilleard said his organisation’s mission is to provide affordable, clean power solutions to underserved markets, and this is achieved by deploying capital into energy projects that enable businesses to focus on their core operations.
“Our partnership with Caledonia demonstrates the efficacy of this model for the mining sector, benefiting the mine’s operations and ultimately enabling sustainable mining.
“We look forward to pursuing these acquisitions with miners across the continent,” he said.
Construction of the solar plant was initially financed by a registered offering of Caledonia’s shares in the United States in 2020 and this raised US$13 million through the issue of 597 963 shares.
Since commissioning in February last year, the solar plant has generated over 47 350 megawatt hour and profits attributable to the solar plant for the year ended December 31, 2023 were US$728 023.
Caledonia said the power generated from the solar plant has significantly reduced the use of diesel generators and grid power at Blanket Mine, ensuring approximately a fifth of the mine’s daily electricity needs are met by solar.
The project, connected to the Blanket grid in November 2022 is in line with the Government’s strategy to boost power production.
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