Caledonia Mining Corp PLC said it agreed to buy the Maligreen project in the Gweru mining district in Zimbabwe, from Pan African Mining (Private) Ltd, a privately owned Zimbabwean company, for US$4mln (£2.9mln) in cash.
The project is estimated to contain a NI 43-101 compliant inferred mineral resource of about 940,000 ounces of gold as of end August 2021, said Caledonia Mining.
About 76% of the resource estimate, or 712,000 ounces, is located at depths shallower than 220 metres indicating the potential for an open pit mining operation.
Maligreen covers approximately 550 hectares and comprises two historic open pit mining operations which produced about 20,000 ounces of gold between 2000 and 2002 before the operation was closed.
Caledonia expects to drill an initial 4,800 meters at an estimated cost of US$1.6mln over a period of 18 to 24 months to improve its understanding of the existing resource and assess the potential for a mining operation.
"We are delighted to enter into this agreement to purchase the claims over Maligreen, one of the more significant exploration opportunities in Zimbabwe,” said Steve Curtis, chief executive of Caledonia Mining.
“The property has significant potential and has benefitted from many years of exploration activity. Initial evaluation of the inferred mineral resource by our own team and by independent consultants indicates the potential for a significant mining operation,” he said.
“We believe the property also offers significant upside exploration potential at the north-west extensions to the existing inferred mineral resource and at additional exploration targets in the northern part of the property.
"This transaction is an important next step as Caledonia pursues its strategy to become a multi-asset gold producer in Zimbabwe, one of the last gold frontiers in Africa," he concluded.