Caledonia Mining Corporation (CMCL)

[NYBob]

Caledonia settles gold mine dispute with Zimbabwe -
The Canadian Press
Published Tuesday, Aug. 23, 2011 8:22AM EDT
Last updated Tuesday, Aug. 23, 2011 8:24AM EDT

Caledonia Mining Corporation (CAL-T0) says it has resolved
a dispute with the Zimbabwean government over the future
ownership of the company's Blanket gold mine in
the southern African country.

Under the settlement announced Tuesday, Caledonia will
resubmit a new plan to sell control of the mine to
black Zimbabwean owners under a national law that went
into effect last year.

As well, the government will suspend plans to cancel
the operating licence for the mine.

The company and government met Monday and “agreed on a process
that will result in the production of a revised Indigenization
Implementation Plan for Blanket Mine that is compliant with
the Indigenization and Economic Empowerment Act,” said a joint
statement released before North American stock markets opened
Tuesday.

“The plan will take into account the independently verified
intrinsic value of the mineral resources, plant and equipment
at the mine,” the statement said.

A new Zimbabwean law that forces foreign and local companies
to sell a majority stake in their businesses to black
Zimbabweans came into effect last year and required Caledonia
to submit a so-called indigenization plan with the government.

Caledonia said last week it presented such a plan, but
the country's minister responsible for the policy has asked
the mines minister to revoke Blanket's operating licence
“on the grounds that Caledonia's proposal does not meet
the legislated indigenization requirements.”

Under the Zimbabwean law,
companies worth more than $500,000 (U.S.) run by
non-black Zimbabweans have five years to sell
a 51 per cent (before 2014),
upon the threat of jail sentences.

Blanket's operations continued normally while the company
dealt with the dispute.

Caledonia is an African-focused miner with the operating
Blanket gold mine in Zimbabwe,
two platinum-nickel exploration projects in South Africa
and a cobalt-copper exploration project in Zambia.

It also has a portfolio of exploration prospects in South Africa,
Zimbabwe and Zambia .