Caledonia has selected Voltalia an international renewable energy provider to build its 12MW solar plant at the Blanket Mine in Zimbabwe. Caledonia and Voltalia have agreed an initial design phase for the project after which, subject to the conclusion of an Engineering, Procurement and Construction (EPC) contract, procurement and construction are expected to begin with current indicated commissioning for the plant in the last quarter of 2021.
Caledonia raised the funds required to construct the plant by way of an at the market sales process on NYSE American conducted by Cantor Fitzgerald & Co on its behalf. Pursuant to the process, the Company issued 597,963 shares, representing considerably fewer issued shares than the expected 800,000 that it had initially applied to list.
Improving electricity supply
The project is primarily intended to protect the Blanket Mine from any further deterioration in the electricity supply situation. Whilst the project is therefore being done for largely defensive reasons, it is expected to yield a modest return to shareholders after taking account of the dilutive effect of the equity issued to fund it.
Voltalia is an international renewable energy provider and is listed on the regulated market of Euronext Paris. It has considerable experience in the delivery of renewable energy projects including the development, construction, operation and maintenance of solar power plants. Voltalia is already active notably in Burundi, Malawi and South Africa.
According to Caledonia, the company looks forward to working closely with Voltalia to deliver a successful project at the Blanket Mine which, on completion, is expected to provide approximately 27% of the mine’s total electricity demand. This will significantly reduce the risk to the mine of any further deterioration in the quality of grid power which would necessitate increased use of diesel generators (which are substantially more expensive than grid power). The plant will also reduce Blanket Mine’s environmental footprint.