JERSEY miner, Caledonia Mining Corporation plc, is selling its local subsidiary, Caledonia Mining Services (Private) Limited, which owns a 12,2 megawatt (MW) solar project, to CrossBoundary Energy Holdings (CBE) for US$22,35 million.

CBE is a Kenya-based renewable energy solutions firm mainly focused in Africa although it has projects in Australia.

It has a portfolio of over US$285 million of solar, wind and storage projects for leading companies, including Actis, Diageo, Heineken, Rio Tinto, Syrah Resources and Unilever.

In a statement released yesterday, Caledonia said the US$22,35 million was payable in cash.

“Caledonia Mining Corporation plc is pleased to announce that it has signed a conditional sale agreement for the entire issued share capital of its Zimbabwe subsidiary, Caledonia Mining Services (Pvt) Limited, which owns and operates the 12,2MWac solar plant that supplies power to Blanket Mine,” the miner said.

“CMS is to be sold to CrossBoundary Energy Holdings  for US$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.”

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Caledonia said upon completion of the sale, it would realise a profit on the US$14,3 million construction cost.

“Completion of the sale will return capital to Caledonia at a key moment in the company’s growth trajectory,” the miner said.

“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.”

According to Caledonia, the construction of the solar plant was initially funded by a registered offering of Caledonia’s shares in the US in 2020 which raised US$13 million through the issue of 597 963 shares.

Caledonia said the commissioning in February 2023, the solar plant had generated over 47 350 megawatt per hour of power and profits attributable to the solar plant last year were US$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 miner said.

“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 focusing management’s attention on our core business of gold mining and exploration.”

CBE is a subsidiary of Kenyan advisory services firm CrossBoundary Group.

“CrossBoundary Energy’s mission is to provide affordable, clean power solutions to underserved markets and we achieve this by deploying capital into energy projects that enable businesses to focus on their core operations,” CBE managing partner Matthew Tilleard said.

“Our partnership with Caledonia demonstrates the efficacy of this model for the mining sector, benefiting the mine’s operations and ultimately enabling sustainable mining. We look forward to pursuing these acquisitions with miners across the continent.”