Operations
Solar
The Company has constructed a 12MWac solar plant at a cost of approximately $14 million to improve the quality and security of Blanket’s electricity supply and to reduce its environmental footprint. The plant was commissioned in the third quarter of 2022 and provides approximately 25% of Blanket’s total daily electricity demand.
In October 2024 Caledonia announced that it had signed a conditional sale agreement for the entire issued share capital of its Zimbabwe subsidiary, Caledonia Mining Services (Private) Limited, which owns and operates the 12.2MWac solar plant that supplies power to Blanket Mine. CMS is to be sold to CrossBoundary Energy Holdings (“CBE”) for $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.
Highlights
- Upon completion of the sale, Caledonia will realise a profit on the $14.3 million construction cost by selling the plant for $22.35 million.
- Completion of the sale will return capital to Caledonia at a key moment in the Company’s growth trajectory.
- Caledonia will retain the exclusive energy off take, ensuring approximately a fifth of Blanket Mine’s daily electricity requirement continues to be met by renewable power.
- CBE has been invited to tender for an expansion of the solar plant to deliver further renewable energy to Blanket Mine.
The construction of the solar plant was initially financed by a registered offering of Caledonia’s shares in the US in 2020 and this raised $13 million through the issue of 597,963 shares.
Since commissioning in February 2023, the solar plant has generated over 47,350Mwh of power, and profits attributable to the solar plant for the year ended December 31, 2023 were $728,023. 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 power. The plant will continue to supply Blanket Mine under an exclusive power purchase agreement.
The sales consideration will be reinvested in Caledonia’s other projects that are expected to yield a higher return to our shareholders and will have the added benefit of focussing management’s attention on our core business of gold mining and exploration.