Caledonia Mining ( NYSE: CMCL ) said Thursday it agreed to purchase the Bilboes gold project in Zimbabwe for ~$53.3M in shares representing 28.5% of the company's fully diluted equity, plus a 1% net smelter royalty on the project's revenues.
The deal could make Caledonia ( CMCL ) Zimbabwe's biggest gold producer, with the potential to more than double its annual output .
A previous feasibility study indicates the potential for an open-pit gold mine producing an average of 168K oz/year over a 10-year life of mine, and Caledonia ( CMCL ) said it will conduct further studies to determine the best way to proceed.
The Bilboes operations have been mothballed as the company's owners searched for new investors.
Caledonia Mining ( CMCL ) "looks overvalued based on fundamentals," Gold Panda writes in a bearish analysis published on Seeking Alpha .
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Caledonia Mining to buy one of Zimbabwe's biggest gold projects in $53M deal