Caledonia Mining has entered into an interim financing facility agreement of up to $150m to support the development of the Bilboes Gold Project in Zimbabwe.
The agreement was arranged through Caledonia Holdings Zimbabwe, a subsidiary of the company, and is designed to provide additional funding as the group continues to pursue its wider financing strategy for Bilboes.
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The facility is syndicated by a consortium of eight Zimbabwean financial institutions, including Stanbic Bank Zimbabwe and CBZ Bank as lead arrangers.
Other participating banks are Central African Building Society, FBC Crown Bank, FBC Bank, NMB Bank, First Capital Bank, and ZB Bank.
The facility, set for 36 months with an option for a one-year extension, consists of a $50m revolving credit tranche at secured overnight financing rate (SOFR) plus 8.10% interest, and a $100m term tranche at SOFR plus 7.90%, which includes a potential $50m accordion option.
The first 18 months of the term loan allow for a capital repayment pause, after which repayments are to be made quarterly.
According to Caledonia, this interim loan forms part of a four-part funding strategy for the Bilboes project.
The company has already completed a gold price hedging programme as well as a $150m convertible notes offering, which generated approximately$130m in net proceeds.
Discussions continue with prospective lenders for a final, longer-term finance package.
Construction of the Bilboes Gold Project has started with initial ground works, and the main construction is scheduled for 2027 and 2028.
Caledonia aims to deliver first gold from the project by October 2028.
The company stated that the facility complements its recent funding activities and advances its plan to become a multi-asset gold producer focused on Zimbabwe.
Caledonia CEO Mark Learmonth said: “The support received from banking institutions and international capital markets investors reflects confidence in the quality of Bilboes, our development approach and the broader outlook for Zimbabwe’s gold mining sector.
“The successful execution of these financing initiatives demonstrates our ability to access multiple sources of capital and provides a strong foundation as we continue to progress the final project finance component of the funding strategy.”
Caledonia acquired 100% ownership of Bilboes in January 2023.
