Caledonia to list on New York Stock Exchange
CALEDONIA Mining Corporation which controls 49 percent of Zimbabwe gold miner, Blanket Mine, will list on the New York Stock Exchange (NYSE MKT) as the group looks for increased trading liquidity and access to a larger pool of potential United States investors.
The company has already made submissions to NYSE MKT with a view to listing as soon as reasonably practicable following the Annual General Meeting subject to approval from NYSE. The listing application is subject to review by the NYSE Issuer Regulation Group.
Caledonia Mining Corporation which is listed on Toronto Stock Exchange yesterday said while the company intends to satisfy all NYSE requirements for initial listing, no assurance can be given that its application will be approved.
“The company is currently making regulatory filings with the US Securities and Exchange Commission and therefore anticipates minimal additional regulatory reporting obligations as a result of the proposed listing.
“The board of directors of the company believes that the listing of the company’s shares on NYSE may result in increased trading liquidity and enable access to a larger pool of potential US investors,” said Caledonia in a statement.
“The company has observed, as part of its due diligence into a potential listing on a recognised United States exchange that a significant proportion of dual listed peer comparators with a listing on NYSE enjoy greater trading liquidity in this market than on their other exchanges,” said the mining company.
The minimum share price threshold for listing on NYSE MKT is $2 per share and in addition to this requirement, a share price of over $5 per share is considered necessary to satisfy the eligibility requirements of institutional and retail investors in the United States.
Caledonia said a share consolidation which results in the share price exceeding these thresholds, provided that the listing is successful, could potentially result in better overall trading liquidity, a lower cost of capital and other benefits for the company and its shareholders.
The company is, therefore, in summary proposing that its shareholders approve a share consolidation on the effective basis of 1 Common Share for every 5 Common Shares held in order to exceed the thresholds mentioned above. The share consolidation will be conducted by way of a two -stage process.
“The company’s proposed listing on NYSE is a further step towards the transformation on which the business embarked with the adoption of the Investment Plan at Blanket Mine in October 2014. The main component of this plan is the construction of the new Central Shaft, which is expected to come into production in 2018 after which we expect production to ramp up to 80 000 ounces of gold by 2021.
“We expect that the increased gold production from the Blanket Mine at a lower cost per ounce will result in attractive cash returns for both the company’s shareholders and Blanket Mine’s local partners and stakeholders,” Caledonia chairman Leigh Wilson.
“It is appropriate that the company’s shares are listed on a recognised US exchange that potentially offers the liquidity and improved access to institutional and retail investors in the US market which will support the company in its next stage of development,” he said.