Caledonia Mining Rides High on Record Production

Oscar J Jeke- Zim Now Reporter

Caledonia Mining Corporation has kicked off 2025 with a bang, setting a new first-quarter production record at its flagship Blanket Mine in Zimbabwe.

The company announced gold production of 18,671 ounces in Q1 2025, surpassing both the 17,050 ounces produced during the same period in 2024 and the previous Q1 record of 18,515 ounces set in 2022.

This milestone comes amid significant momentum following a record-breaking performance in 2024, with gross profit soaring by 86% to US$77 million.

The surge in production and profits is attributed to improved cost efficiency, higher milling volumes, and elevated gold prices. Blanket Mine produced 76,656 ounces of gold in 2024, slightly up from 75,416 ounces in 2023, supported by a record milling throughput of 797,000 tonnes. The average gold price per ounce increased substantially from US$1,910 in 2023 to US$2,347 in 2024, pushing total revenue up from US$146.3 million to US$183 million.

Caledonia has responded to this strong performance by unveiling a US$41.8 million capital expenditure plan for 2025, which will primarily fund ongoing expansion and modernization at Blanket Mine. Of the total, US$34.9 million will be directed towards the mine to improve operational efficiency and long-term resilience.

Another US$5.8 million will go toward advancing development at the Bilboes and Motapa projects. The company also completed the strategic sale of its 12.2 MWac solar power plant at Blanket Mine to CrossBoundary Energy for US$22.35 million, using the proceeds to cut net debt by 56%, from US$8.7 million in December 2024 to US$3.8 million as of April 2025.

Chief Executive Officer Mark Learmonth hailed the company’s strong finish in 2024 and its excellent start to 2025. “Production in Q1 2025 has set a new record for a first quarter at Blanket, with over 18,500 ounces produced — a particularly strong performance given that the first quarter is traditionally our weakest,” said Learmonth. He added that the higher production levels, combined with historically high gold prices, have positioned the company well to generate healthy cash flows and reinvest in growth.

Caledonia is not resting on its laurels. The company is actively pursuing the development of the Bilboes gold project, which could become Zimbabwe’s largest gold-producing mine. Located 75 km north of Bulawayo, Bilboes is expected to boost Caledonia’s annual gold production by more than 200,000 ounces.

A preliminary economic assessment shows the potential for 1.5 million ounces of gold over a 10-year lifespan, with a payback period of just 1.9 years at a gold price of US$1,884 per ounce. The company is currently seeking US$309 million in peak funding to develop Bilboes and is preparing a new feasibility study, expected to be completed in the first half of 2025.

Caledonia's strategic move to divest the solar facility at Blanket Mine reflects a growing trend among Zimbabwean miners to monetize non-core infrastructure while advancing sustainability goals. The solar plant, built at a cost of US$14.3 million and commissioned in February 2023, has generated over 57,700 MWh of clean energy, meeting 20% of the mine’s daily energy demand. Through a 25-year Power Purchase Agreement with CrossBoundary Energy, Blanket Mine will continue to benefit from affordable and stable energy, insulating it from Zimbabwe’s erratic grid supply and inflationary tariffs.

Caledonia is aiming for gold production between 74,000 and 78,000 ounces in 2025.

Longer-term targets are even more ambitious, with annual production projected to reach between 92,000 and 100,000 ounces by 2026.

Despite rising cost pressures, the company expects to fund all capital expenditures from internal cash flows and reserves, ensuring uninterrupted dividend payments.