Zimbabwe's high-quality gold assets draw strong global interest

Zimbabwe-linked mining projects do not always attract significant international capital, but Caledonia Mining's latest bond issue has demonstrated that high-quality gold assets can draw strong global interest.

Last week, the gold producer launched a US$100 million convertible notes offering to help fund development of its new Bilboes mine. Demand far outstripped expectations, with orders from mainly US institutional investors surpassing US$600 million within just three days—over six times the initial target.

The overwhelming response prompted Caledonia to increase the size of the offering multiple times. The initial US$100 million raise was first expanded to US$125 million, before early investors exercised an option to purchase an additional US$25 million worth of bonds. The total amount raised ultimately reached US$150 million, marking the largest international capital raise for a Zimbabwean company in years.

Caledonia CEO Mark Learmonth described the strong uptake as a “tremendous endorsement” of the company's strategy, assets, operational track record, and long-term prospects.

Caledonia has long been one of Zimbabwe's most consistent large-scale mining performers, making it particularly attractive to institutional investors. The company plans to spend an additional US$162.5 million on capital expenditure in 2026.

The bond raise forms the first stage of a four-part funding plan to bring Bilboes into production. The second stage involves gold price hedging: in December, Caledonia acquired put options guaranteeing a minimum price of US$3,500 per ounce for 3,000 ounces per month from January 2026 to December 2028, protecting cashflows from Blanket Mine during Bilboes' peak spending period.

The third stage is bank funding. In November 2025, Caledonia began discussions with Zimbabwean and South African banks for an interim facility of up to US$150 million, expected to be secured by mid-2026. The final stage involves project finance, with early lender discussions already underway and a formal process anticipated to take a year or more as institutions independently review Bilboes' resource and feasibility study.

Rising gold prices, driven by global geopolitical uncertainties, are boosting investor appetite for Zimbabwean gold projects. However, concerns remain around local policy issues, including forex retention rules and proposed royalty increases expected later this year.

The successful bond issue underscores that, despite such challenges, Zimbabwe's high-quality gold projects can attract substantial international support when backed by strong operational and financial fundamentals.