Caledonia acquires Bilboes Gold Ltd

Zim Now Writer

Gold miner Caledonia Mining Corporation PLC has completed the acquisition of Bilboes Gold Limited, which owns the Bilboes gold project in Zimbabwe, through a subsidiary.

Mark Learmonth, the company’s chief executive officer, said in a statement: “Completion of the transaction is the cornerstone in Caledonia’s strategy to create a mid-tier, multi-asset gold producer focused on Zimbabwe.

“Bilboes is a large, high-grade sulphide deposit which is amenable to low-cost, open-pit operations. A feasibility study on the Bilboes project which has been prepared by the Bilboes vendors envisages production of approximately 168 000 ounces of gold per annum over a 10-year life.

“Now that the transaction has completed, Caledonia will commission its own feasibility study to identify the most appropriate way to commercialise this asset having regard to the availability of funding with the objective of maximising Caledonia’s net present value per share. I anticipate the feasibility study will take 12 to 14 months to complete.”

Learmonth added that ore production from the Bilboes oxides is expected to start in early February and the gold miner anticipates recovering gold from the heap leach from March.

“The acquisition of Bilboes should be seen in the context of the successful implementation of the Central Shaft project at Blanket Mine, which is now producing at its target production rate of 80 000 ounces per annum, and the acquisitions of the exploration projects at Maligeen and Motapa. We recently announced an upgrade to the existing mineral resource base at Maligreen. Motapa is at a much earlier stage but, given its large size, its attractive geological prospectivity and its contiguity with Bilboes, we believe it is a highly attractive addition to our portfolio,” said Learmonth.

The total consideration payable for the Bilboes acquisition is, subject to adjustment, 5,123,044 shares representing approximately 28.5% of Caledonia's fully diluted share capital and a 1% net smelter royalty (NSR) on the project’s revenues. Based on the last trading day’s closing price for Caledonia shares on the NYSE American exchange of US$12.82 per share, the value of the maximum number of new shares that could be issued as consideration if there is no adjustment is currently US$65,677,424.

Bilboes is a large, high-grade gold deposit located approximately 75 kilometres north of Bulawayo, and, historically, it has been subject to a limited amount of open-pit mining.

The project has NI43-101-compliant proven and probable mineral reserves of 1.96 million ounces of gold in 26.64 million tonnes at a grade of 2.29 grams per ton (g/t) and measured and indicated mineral resources of 2.56 million ounces of gold in 35.18 million tonnes at a grade of 2.26 g/t and inferred mineral resources of 577,000 ounces of gold in 9.48 million tonnes at a grade of 1.89 g/t. The project has produced approximately 288,000 ounces of gold since 1989.