Morgan & Co says Caledonia Mining Corporation’s planned development of the Bilboes gold project was a key driver of last week’s positive market sentiment, after the miner outlined its expansion strategy and funding plans.
In its weekly market highlights, the brokerage said Caledonia’s announcement that it intends to commence development of the Bilboes project later this year, subject to board approval and funding, helped push the company’s share price up by about 20 percent to US$47.85.
The project is expected to require initial funding of about US$136 million.
Caledonia later said it plans to spend US$132 million this year as part of a broader US$162.5 million capital expenditure programme for 2026 to kick-start development of Bilboes, which is projected to become Zimbabwe’s largest gold mine once operational. The mine carries a total estimated capital cost of US$584 million.
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The company expects first production from Bilboes in late 2028, with steady-state output of about 200,000 ounces of gold per year from 2029 for an initial 10-year period. Caledonia already operates the Blanket Mine, which produces about 80,000 ounces of gold annually.
To support the expansion, Caledonia last week announced a US$125 million private placement of convertible bonds to institutional investors, maturing in January 2033. The company said most of the proceeds would be used to fund the Bilboes development, alongside a mix of non-recourse senior debt, cash flow from existing operations and alternative financing structures, including metal streaming.
Morgan & Co said the broader market also closed the week on a strong note, with the Victoria Falls Stock Exchange (VFEX) ending bullish as gains were recorded across several counters. However, SeedCo International declined 15.21 percent to US21.30 cents, while African Sun shed 7.48 percent to US370.09 cents.
On the Zimbabwe Stock Exchange (ZSE), turnover surged to ZWG$327.5 million, driven largely by Econet, although overall market performance was neutral as gains and losses offset each other.
Looking ahead, Morgan & Co expects a moderation in ZSE turnover this week as buying pressure in heavyweight counters eases. The firm forecasts a bullish trend for Econet, while Delta and other blue-chip stocks are expected to trade sideways.
Caledonia’s outlook has been further supported by strong global gold prices and a more favourable local policy environment, following the government’s recent reversal of plans to increase gold royalties and change the tax treatment of capital expenditure.
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