Caledonia to deliver 2,5t of gold in Zimbabwe

Caledonia Mining Corporation, the Jersey-based miner, is set to contribute 2.5 tonnes to Zimbabwe's projected 2025 gold deliveries of over 40 tonnes, with output expected to rise to 7.5 tonnes once its Bilboes Mine comes online over the next three years.

The anticipated increase in national gold deliveries comes as small-scale miners, encouraged by government incentives, 100% forex retention, and record global prices, ramp up production. According to the Zimbabwe Miners Federation, gold deliveries had already reached 33 tonnes through September.

Caledonia's current main asset, Blanket Mine, has an estimated remaining life of about 10 years, prompting the company to gradually shift focus to its larger Bilboes project, which will become the firm's new flagship mine. Preliminary estimates suggest that Bilboes could yield between 250,000 and 300,000 ounces of gold annually.

Speaking at a media briefing in Harare, Caledonia CFO Ross Jerrard said Bilboes' expected returns would significantly enhance the firm's internal cash generation.

"At the moment, we're producing 2.5 tonnes of the 43 tonnes national production. Once Bilboes comes online, we will increase our 2.5 tonnes to 7.5 tonnes," he said.

Jerrard highlighted Bilboes as a low-cost operation, projecting production costs of about US$1,000 per ounce, compared to Blanket Mine's US$1,800 per ounce, which has higher sustaining capital requirements.

"By bringing Bilboes online, it reduces our cost profile as a group, produces more ounces, and generates free cash flow," Jerrard said.

Caledonia has been advancing a feasibility study for Bilboes, originally scheduled for release in the first half of 2025. Ongoing work has prompted further evaluation of new factors that could enhance project economics. Unlike Blanket Mine, where Caledonia holds a 64% stake, the company owns 100% of Bilboes, ensuring greater returns for shareholders.

Jerrard emphasized that Bilboes and Motapa mines are part of a strategy to produce gold at lower costs, creating larger margins amid rising international prices.

"International gold prices have quadrupled over the past 18 months, and projections indicate further increases. Banks like Bank of America are forecasting US$4,600 to US$4,700 per ounce by the end of next year," he said.

The bank has recently projected gold could reach US$5,000 per ounce by 2026, driven by market hedging amid geopolitical tensions. Caledonia's phased approach to developing Bilboes is expected to make Zimbabwe a significant low-cost gold producer, supporting both economic growth and investor returns.