At a Glance
- Caledonia plans $132 million investment to develop Zimbabwe’s biggest gold mine amid record gold prices.
- Bilboes project targets first production 2028, ramping up to 200,000 ounces annually.
- Financing strengthened by bond sale and tax relief, supporting long-term Zimbabwe gold expansion.
Caledonia Mining Corporation, a Zimbabwe-focused gold producer, plans to spend $132 million this year to kick off development of what is set to become Zimbabwe’s largest gold mine, the company said Wednesday.
The investment comes as miners worldwide move to lift output amid strong gold prices. Spot gold touched a fresh high of $4,639.48 an ounce early Wednesday, supported by rising geopolitical tensions in the Middle East, questions around the Federal Reserve’s independence and easing inflation that has strengthened expectations for interest-rate cuts.
Caledonia said the spending forms part of a broader $162.5 million capital expenditure program planned for 2026. The outlay remains subject to board approval and the availability of financing, the company said in a production update.
Bilboes project moves closer
Caledonia currently operates the Blanket mine, which produces about 80,000 ounces of gold a year. Its next major focus is the Bilboes mine, a large-scale project with a projected total development cost of $584 million.
Construction at Bilboes is expected to lead to first production in late 2028. Once fully operational, the mine is forecast to produce about 200,000 ounces of gold a year from 2029, with an initial mine life of 10 years.
To support the project, Caledonia on Thursday announced a $125 million private placement of convertible bonds with institutional investors. The bonds mature in January 2033, and most of the proceeds will be directed toward Bilboes, the company said.
Financing plan bolstered by tax reversal
Caledonia plans to fund the mine through a combination of non-recourse senior debt, cash generated from existing operations and alternative financing options, including streaming arrangements, where investors provide upfront funding in exchange for a portion of future gold output.
The company’s plans were helped last month after Zimbabwe’s government reversed proposals to double the gold royalty rate and alter the tax treatment of capital spending, easing concerns across the mining sector.
Caledonia builds long-term Zimbabwe gold assets
Headquartered in Jersey, Caledonia is focused entirely on Zimbabwe. It owns 64% of the Blanket mine and holds full ownership of the Bilboes sulphide project as well as the Motapa and Maligreen gold claims. The company is listed on the NYSE and London’s AIM.
After lifting output at Blanket to 80,000 ounces in 2022, Caledonia said its priorities are to keep production steady at 75,000 to 80,000 ounces a year, advance Bilboes and build a broader portfolio of gold assets in Zimbabwe.
