Zimbabwe-linked mining deals don’t always attract deep global capital, but stronger-than-expected demand for Caledonia Mining’s new bond issue shows US institutions have an appetite to back some large-scale quality gold projects.
Last week, the gold miner went to the market seeking US$100 million to help fund development of its new mine, Bilboes. Demand, mainly from large US institutional investors, blew past expectations. Within just three days of approaching the market, investors had put in orders of more than US$600 million, over six times what Caledonia was looking for.
That surge forced the company to increase the size of the offer. What started as a US$100 million raise was increased to US$125 million, before early investors exercised an option to buy an extra US$25 million worth of bonds. The final amount raised came to US$150 million, Caledonia said on Wednesday.
The money was raised through convertible notes, a type of bond that pays interest but can later be converted into shares. It is the biggest international capital raise for a Zimbabwean firm in years.
Caledonia chief executive Mark Learmonth said the response from investors was a major vote of confidence.
“The successful Convertible Notes Offering – with the upsizing of the offering to US$150 million due to exceptionally strong support – marks a major milestone for Caledonia. Receiving more than US$600 million of demand from high quality North American investors is a tremendous endorsement of our strategy, the quality of our assets, our operational track record, and the long-term prospects of the Company.”
Caledonia has been one of the most consistent performers of the country’s larger mines, making it attractive to investors. It plans to spend an additional US$162.5 million on capital expenditure in 2026.
The bond raise is the first step in a four-part funding plan to bring Bilboes into production. Another leg is gold price hedging. In December, Caledonia bought put options that lock in a minimum gold price of US$3,500 an ounce on 3,000 ounces a month from January 2026 to December 2028, protecting cashflows if prices fall. The hedge is meant to support strong cash generation from Blanket Mine during Bilboes’ peak spending phase and to reassure banks.
The third stage is bank funding. In November 2025, Caledonia began talks with Zimbabwean and South African banks for an interim facility of up to US$150 million, which it expects by mid-2026. The final stage is project finance. Early discussions have started, with a formal process opening this quarter and expected to take a year or more, as lenders independently review the Bilboes resource and feasibility study.
Gold prices have risen to record highs, driven by global geopolitical uncertainties. This is driving new interest in Zimbabwean gold assets, although this is tempered by concern over policies such as forex retention rules and higher royalties likely to kick in this year.
ALSO READ | Caledonia approves US$484M plan to build Zimbabwe’s biggest gold mine: Here’s how it plans to fund it
