By Business Reporter

CANADA based Caledonia Mining Corporation said it had entered into a memorandum of understanding to acquire Fremiro Investments’ 15% shareholding in Zimbabwe’s Blanket gold mine in Zimbabwe for $16.7m.

The payment would be made via the cancellation of a loan between the two entities, which stood at $11.5m at June 30, and the issue of new Caledonia shares at $7.15 each.

On completion of the transaction, Caledonia would have a 64% shareholding in Gwanda-based Blanket and Fremiro would 6.4% of Caledonia’s diluted equity.

Blanket was expected to achieve an annual production rate of at least 80k ounces per annum by 2021, at a low cash cost, chief executive Steve Curtis said.