Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL)'s conditional sale of its 100%-owned 12.2MWac solar plant to CrossBoundary Energy (CBE) for a US$8.1million profit on construction cost frees up cash for potentially higher return investments, says broker Panmure Liberum.
Completion of the sale will take a few months but, importantly, the plant will continue to supply Caledonia’s 64%-owned Blanket mine under an exclusive power purchase agreement.
CBE has already been invited to tender for an expansion of the solar plant to deliver still further renewable energy to Blanket.
Buy with a target price of 1,589p, up from 1,562p, is the broker’s recommendation.