Caledonia plans to spend $132 million on Zimbabwe’s biggest gold mine this year

Caledonia Mining Corporation plans to spend $132 million this year to launch development of what, once operational, will be Zimbabwe’s largest gold mine, the company announced on Wednesday.

Miners are riding a wave of record bullion prices to expand output. Spot gold prices hit another record high of $4,639.48 an ounce early on Wednesday, fueled by escalating tensions in Iran, concern over the Federal Reserve’s autonomy and softer inflation readings that boosted rate cut bets.

Caledonia said in a production update that the planned spending, part of a $162.5 million total capital expenditure program for 2026, was subject to board approval and availability of funding.

Caledonia, which already operates the 80,000-ounce-per-year Blanket mine in Zimbabwe, plans to develop the Bilboes mine at a projected total capital cost of $584 million.

Production from the new mine is expected to begin in late 2028, with steady-state annual output of 200,000 ounces anticipated from 2029 for an initial period of 10 years.

The company has said it plans to fund the Bilboes project through a mix of non-recourse senior debt, contributions from existing operations as well as specialized financing methods such as streaming, where investors provide cash in return for future metal supply.

Caledonia’s expansion plans received a boost last month when Zimbabwe’s government reversed plans to double the gold royalty rate and change the tax treatment for capital expenditure.

(By Chris Takudzwa Muronzi; Editing by Nelson Banya and Joe Bavier)