Caledonia Mining is set to advance with the development of the Bilboes gold project in Zimbabwe following the completion and publication of its feasibility study.
The study confirmed a single-phase development method as the most economic option for the project.
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The project area spans 2,731.60 hectares (ha) in Matabeleland North province, located approximately 80km north of Bulawayo, Zimbabwe’s second-largest city.
The study shows proven and probable mineral reserves of 1.75 million ounces (moz) of gold at a grade of 2.26 grams per tonne (g/t).
In addition, measured and indicated mineral resources, excluding mineral reserves, are reported to be 532,000oz of gold at 1.37g/t.
The inferred resources are estimated at 984,000oz of gold at 1.62g/t.
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By GlobalDataThe project will employ Metso’s BIOX technology for refractory ore processing. The BIOX process is said to increase the achievable gold recovery by destroying sulphide minerals and exposing the gold for subsequent cyanidation.
The feasibility study projects a plant throughput of 240,000 tonnes (t) per month for the first six years of production, decreasing to 180,000t per month for the remainder of the project.
Metallurgical recovery rates are expected to range from 83.6% to 88.9%.
Approximately 200,000oz are being targeted during the first full production year, scheduled for 2029.
Over a mine life of 10.8 years, total production is projected at 1.55moz, with an all-in-sustaining cost of $1,061/oz.
The Bilboes gold project’s peak funding requirement is estimated at $484m (£368.06m).
Management anticipates an additional $100m will be needed for interest and working capital, along with a further $50m for standard cost overrun facilities mandated by senior lenders.
Caledonia Mining plans to pursue a phased fund-raising approach to provide early liquidity and accelerate the development timeline.
The funding strategy is structured to maximise the uplift in net present value per Caledonia share by minimising equity issuance.
Caledonia acquired 100% ownership of Bilboes in January 2023 for $65m, settled through the issuance of approximately 5.1 million Caledonia shares and the grant of a 1% net smelter return to a previous owner.
