Zimbabwe focused gold producer, Caledonia Mining Corporation has entered into an “At the Market” sales agreement with Cantor Fitzgerald & Co.

The agreement allows Caledonia, at discretion, to sell up to US$13m worth of shares.

The company said any sales of shares would occur by means of ordinary brokers’ transactions or block trades, with sales only being made on the NYSE American at market prices.

Management at Caledonia expects to use the amount of any net proceeds from the sales for investment in the construction of a solar power plant to supply electricity to Blanket Mine in Zimbabwe.

“Cantor, acting as sales agent, may conduct sales for the benefit of the Company should the Company elect to initiate a transaction or transactions, dependent on market conditions and such other terms as the Company may specify.

“It is possible, and indeed likely, that multiple transactions could be effected under the ATM Sales Agreement over time,” said Caledonia.

“The ATM Sales Agreement is not a formal placing and any potential sales of new shares are not underwritten by the sales agent.

“Accordingly an application has been made to AIM for a block admission in respect of up to 800,000 new depositary interests representing the same number of shares in the share capital of the Company which will rank pari passu with the existing shares in issue. It is expected that the block admission will become effective on 27 July 2020.

“These new shares will be issued and allotted from time to time to settle any sales conducted under the ATM Sales Agreement.”

Following admission, the Caledonia’s issued share capital remains unchanged at 11,520,860.

The company will make six-monthly announcements of the utilisation of the block admission, in line with its obligations under AIM Rule 29.