The company will buy back Fremiro's 15% shareholding for US$16.667 million to be settled through the cancellation of a $11.5 million loan and the issue of 727,266 new shares at $7.15 per share, giving Fremiro 6.42% of Caledonia' equity.

Fremiro gained the 15% equity in 2012, when Caledonia complied with the country's indigenisation and economic empowerment act by selling 41% of Blanket to indigenous Zimbabwean shareholders in exchange for $30 million of facilitation loans.

At the time, besides Fremiro's 15% stake, 16% went to the National Indigenisation and Economic Empowerment Fund (NIEEF) and 10% to Blanket Employee Trust Services. Caledonia also donated another 10% to the local community in the form of the Gwanda Community Share Ownership Trust.

"Following amendments to the act passed in March 2018, which removed the 51% indigenisation requirement for gold mining businesses, Caledonia and NIEEF have agreed to enter into a transaction whereby Caledonia purchases Fremiro's 15% shareholding in Blanket," the company said.

The other shareholders will retain their holdings, although Caledonia said it was interested in further increasing its ownership of the mine.

The company remains on track to achieve 80,000 ounces of gold from Blanket by 2021.

Its shares rose 1.82% Friday to £5.60 (US$7.18) each.