BY MTHANDAZO NYONI
CALEDONIA Mining Corporation Plc (Caledonia) has entered into an at-the-market sales agreement with United States financial services firm, Cantor Fitzgerald & Co for the sale of up to US$13 million worth of its shares.
Caledonia expects to use any net proceeds from the sales for investment in the construction of a solar power plant to supply electricity to its mining concern, Blanket Mine in Zimbabwe.
The Gwanda-based gold producer secured a power-generation licence from the Zimbabwe Energy Regulatory Authority, which allows the mining company to install an 18 megawatt solar power plant.
“Caledonia … today announces that it has entered into an ‘at the market’ … sales agreement with Cantor Fitzgerald & Co …, pursuant to which the company may, at its discretion from time-to-time, sell up to US$13m worth of shares,” the company said in a statement last week.
“Any sales of shares would occur by means of ordinary brokers’ transactions or block trades, with sales only being made on the NYSE American at market prices.”
Cantor, acting as sales agent, may conduct sales for the benefit of Caledonia should the mining concern elect to initiate a transaction or transactions, dependent on market conditions and such other terms as it may specify.
“It is possible, and indeed likely, that multiple transactions could be effected under the ATM sales agreement over time. The ATM sales agreement is not a formal placing and any potential sales of new shares are not underwritten by the sales agent,” the statement reads in part.
Accordingly, an application has been made to AIM for a block admission in respect of up to 800 000 new depositary interests representing the same number of shares in the share capital of Caledonia which will rank pari passu (on equal footing) with the existing shares in issue. It is expected that the block admission will become effective on July 27, 2020, the statement says.
“These new shares will be issued and allotted from time-to-time to settle any sales conducted under the ATM sales agreement.”
Following admission, Caledonia’s issued share capital remains unchanged at 11 520 860.
Caledonia said it would make six-monthly announcements of the utilisation of the block admission, in line with its obligations under AIM Rule 29.
Founded in 1945, Cantor is a global financial services firm specialising in institutional equity, fixed income sales and trading, and serving the middle market with investment banking services, prime brokerage, and commercial real estate financing.