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.

On Thursday, Caledonia announced a private placement of $125 million in convertible bonds to institutional investors. The debt, due to mature in January 2033, will mostly fund the Bilboes mine development, it said.

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)