Thursday, July 21, 2011

Caledonia Mining Corporation (CALVF) Shares At Major Support Level

Caledonia Mining Corporation (CALVF) owns and operates the Blanket Gold Mine in Zimbabwe and is currently producing 40,000 ounces of gold annually.  Zimbabwe has thrown the entire mining sector into a scrambled mess by passing the indigenisation laws back in 2008 that require companies to transition their share ownership to 51 percent blacks.

Here is the news from yesterday:

HARARE -- The Zimbabwe government has thrown out all 175 indigenisation proposals it received from mining companies and promised to boot out any firms that do not meet the September 31 deadline to transfer majority stakes to blacks, Indigenisation and Empowerment Minister Saviour Kasukuwere said yesterday.

Under the controversial law, foreign-owned miners with operations in Zimbabwe must sell at least 51 percent shares to locals or face losing their assets. (source here)

Obviously this is nothing more than outright robbery and thuggery from a backwards nation, but the outcome is far from clear at the moment.

With all of this bad news, Caledonia Mining Corporation shares (CALVF) are trading down near a major support level around $.09 to $.10. (Nine to Ten cents).

The outcome of this mining threat from Zimbabwe officials will most likely have a massive effect on the price of CALVF common stock.  See weekly chart of CALVF below: