Caledonia Mining Corporation Plc has approved the long-awaited development of its Bilboes Gold Project in Matabeleland North after publishing a feasibility study confirming strong economics, robust reserves and a projected annual output that will elevate the company into a mid-tier gold producer.
The study outlines a single-phase development plan with proven and probable reserves of 1.75 million ounces of gold at 2.26 g/t. The project is expected to deliver 1.55 million ounces over a 10.8-year mine life, with first full-year production—around 200,000 ounces—forecast for 2029.
Using a gold price of US$2,548/oz, the feasibility study shows a post-tax net present value (NPV) of US$582 million and an internal rate of return (IRR) of 32.5%, with a payback period of just 1.7 years from the start of production. At the September LBMA spot price of US$3,648/oz, the project’s NPV rises to US$1.23 billion, with an IRR of more than 50%.
The project requires peak funding of US$484 million, with total capital costs estimated at US$584 million. Caledonia plans to finance the development primarily through non-recourse senior debt, internal equity from Blanket Mine and flexible funding instruments including royalties, streams and potential convertible bonds.
Chief executive Mark Learmonth described the feasibility study as a “defining moment” for the company. “Bilboes will transform Caledonia and significantly change our production profile,” he said.
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“A project of this scale should help Zimbabwe reclaim its position as a major gold destination and deliver substantial benefits in foreign exchange earnings and tax revenues.”
The mine—fully permitted and located 80km north of Bulawayo—will use BIOX® technology to treat refractory ore following extensive metallurgical assessments. Plant throughput will average 240,000 tonnes per month for the first six years, reducing to 180,000 tonnes monthly for the remainder of the mine life. Recovery rates range from 83.6% to 88.9%, while all-in sustaining costs are projected at US$1,061/oz.
Caledonia acquired 100% of Bilboes in 2023 for US$65 million in shares plus a 1% net smelter royalty. The company says community ownership and social development structures similar to those at its Blanket Mine will be implemented at Bilboes once consultations begin.
Management expects to complete the project’s funding package by late 2026 or early 2027, with preparations already underway to secure long lead-time equipment in the second half of 2026. Construction will take two years after final procurement, with first production anticipated in late 2028.
To support its capital programme, Caledonia has hedged 3,000 ounces of Blanket Mine’s monthly gold output for three years at a US$3,500/oz strike price—a structure designed to guarantee about US$200 million in cash inflows between 2026 and 2028.
The company will brief analysts and investors on December 1 during a virtual presentation on the feasibility study results and development plan.
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