Caledonia’s CEO says decision on $300m Zimbabwe project ‘a strategic milestone’

By Business Reporter

GOLD producer Caledonia Mining Corporation Plc has announced that it will shortly be filing a preliminary economic assessment (PEA) for a single-phase development of the Bilboes sulphide gold project in Zimbabwe.

The filing is in accordance with Canada’s mineral projects disclosure requirements and reflects the work that has been done by Caledonia and its consultants over the period since the Project was acquired by Caledonia in January 2023.

Apart from the Bilboes project located some 75km north of Bulawayo, Caledonia also majority owns Blanket Gold Mine in Gwanda.

Commenting on the latest development, Chief Executive Officer Mark Learmonth said;

“The Board’s decision to proceed with the single-phase development option for Bilboes represents a key strategic milestone in our journey to becoming a multi-asset, mid-tier gold producer.

“Notwithstanding the general inflationary increase in operating costs and capital costs over recent years, the PEA re-confirms that Bilboes is a high-quality mid-scale asset that can generate attractive economic returns.

“The PEA also confirms that Bilboes has an attractive production profile with the potential to almost triple Caledonia’s production capacity to over 200,000 ounces per annum in combination with production from Blanket Mine.”

He added; “The peak funding requirement for the Project is expected to be approximately $309 million, with a sizable proportion funded through debt.

“The Company and, in the past, Bilboes’ previous owners, have had highly positive engagements with prospective debt providers and we now propose to re-engage with these providers in parallel with the process of preparing the New Feasibility Study.

“To date, 2024 production at Blanket has been robust and the Company remains well positioned to deliver returns to shareholders while expanding our asset portfolio and growing our production profile.

“I am very excited by the opportunity we have to evolve our business, which we believe will generate significant long term shareholder value.”

Caledonia acquired the Bilboes project in January 2023 for about $65.7 million at the time.

The main objective was to construct a large, open-pit operation to extract sulphide mineralisation. Studies by previous owners targeted mine and processing operations to produce an average of 168,000 ounces of gold per annum over a 10-year life of mine.