The $250 million needed to turn Caledonia Mining Corp.’s Bilboes project into what would be Zimbabwe’s largest gold mine is being sought after.
According to Maurice Mason, Caledonia’s vice president of corporate development, the company, which also owns the Blanket gold mine in Zimbabwe, might raise the funds through a combination of loans, its own cash reserves, and stock.
According to Mason, the Bilboes project has the potential to increase Caledonia’s yearly gold production to roughly 170,000 ounces, or about 250,000 ounces overall.
One of many mining investors looking for new opportunities in Zimbabwe is Caledonia, which is backed by investors including Cape Town-based fund manager Allan Grey. This is true even though the economy is buckling under the weight of persistent problems like sporadic power outages, a lack of US dollars, and hyperinflation.
According to Mason, Caledonia is conducting investigations to discover ways to lower the upfront capital while it builds the Bilboes mine over the course of two years.
Mason told reporters via email that it will be by far the largest gold mine in Zimbabwe. “We are considering phased capital raising, but that will depend on the outcome of the review of the feasibility study.”
While Mason acknowledged that investors were hesitant to commit to large mining projects, “our experience has been that investors have been supportive of quality projects with good returns.”
Since its economy collapsed in the early 2000s as a result of the government seizing white-owned commercial farmland and distributing it to blacks, Zimbabwe has struggled to draw large-scale investors.
Due to the lack of dollars, some investors frequently suffer or are unable to remit gains.
Despite the fact that Caledonia has been able to pay dividends from its Blanket mine, Mason noted that, generally speaking, some foreign investors are still anxious about remitting profits from their investments in Zimbabwe as well as about the stability of the nation’s political system.
“Foreign investors need to know that they can repatriate the fruits of their investment,” Mason stated.
Along with tobacco shipments and platinum metals mined by subsidiaries of Impala Platinum and Anglo American Platinum, gold is one of Zimbabwe’s primary exports that generate foreign exchange.
Caledonia purchased the Bilboes property last year in its ongoing effort to increase gold production in Zimbabwe. At the Motapa and Maligreen projects, it is also looking for other gold resources.
