Caledonia Mining Corporation PLC (LON:CMCL, NYSEAMERICAN:CMCL) has now entered into an additional option deal to acquire new prospecting acreage in Zimbabwe.
On top of the Glen Hume option deal announced last week, the company now has an additional option for an area known as Connemara North which is also located within the Gweru mining district in the Zimbabwe Midlands.
It is a region that has historically produced significant quantities of gold, Caledonia highlighted.
Connemara North is the northern section of the currently closed Connemara mine, previously owned by First Quantum Minerals, which was put on ‘care and maintenance’ back in 2001.
Prior to its halting and disposal, the mine had produced around 20,000 ounces of gold per annum from an open pit heap leach operation, the company noted. It is located some 30 kilometres away from Glen Hume and is said to have good road access.
Caledonia has the right to conduct exploration work in the Connemara North area for eighteen months, before acquiring the mining claims.
It is making an initial US$300,000 payment and a US$5mln payment will be due if it opts to acquire the mining claims. The company has also committed to providing the vendor with a 1% net smelter royalty over the project.
“We are excited at the prospectivity of these two properties and if evaluation work proves successful and our exploration programs deliver favourable results,” said Steve Curtis, Caledonia chief executive.
“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.”
Curtis added: “This has been a busy year for Caledonia and with the completion of Central Shaft in sight I am pleased that we are now able to start delivering on the other components of our corporate strategy.”