Aim- and NYSE American-listed Caledonia Mining Corporation announces that, in addition to having entered into an option agreement over the Glen Hume project, in Zimbabwe, earlier this months, it has entered into another option agreement in respect of an additional area in Zimbabwe.
The latest option agreement gives the company the exclusive right to explore over an 18-month period and, if exploration is successful and at its sole discretion, acquire the mining claims over an area known as Connemara North, a property which, like Glen Hume, is situated in the Gweru mining district in the Zimbabwe Midlands that has historically produced significant quantities of gold.
Connemara North is the northern section of the currently closed Connemara mine, which was previously owned by First Quantum Minerals. The Connemara mine was placed on care and maintenance in 2001 and sold in 2003.
Caledonia will pay an initial $300 000 for the option. This will be followed by a further payment of $5-million in cash or shares, if Caledonia chooses to exercise its right to acquire the mining claims.
Caledonia has also agreed to the payment of a 1% net smelter royalty to the vendor on gold it produces from Connemara North.
“We are pleased to enter into this option agreement, which gives us the right to explore and subsequently to acquire mining claims over the Connemara North property, part of a wider area that contained a previously operational mine which shows great potential and has been lying untapped for 20 years.
“Connemara North is also in close proximity to the Glen Hume property over which we have already acquired an option. We are excited at the prospectivity of these two properties and, if evaluation work proves successful and our exploration programmes deliver favourable results, Caledonia will have a great opportunity to establish a footprint in the highly prospective Zimbabwe Midlands which could deliver operating synergies between the two sites," says Caledonia CEO Steve Curtis.