Caledonia completes US$65.7m takeover of Bilboes, deal could make it Zimbabwe’s biggest gold producer

Caledonia Mining has completed the takeover of Bilboes Gold, a transaction that takes it a step closer to becoming the country’s biggest gold producer.

The transaction involves the transfer of 5,123,044 shares. Based on the closing share price on NYSE American of US$12.82 per share, the deal is valued at US$65,677,424.

Bilboes has the potential for an open-pit gold mine producing an average of 168,000 ounces per year over a 10-year life of mine. Caledonia produces 80,000 ounces of gold per year at Blanket Mine.

One of the conditions for the deal, announced last year, had been for Bilboes to get guarantees from the government that it would be able to sell its own gold and retain all its earnings. Victor Gapare, who owned Bilboes, now becomes an Executive Director.

Caledonia CEO Mark Learmonth says: “Now that the transaction has completed, Caledonia will commission its own feasibility study to identify the most appropriate way to commercialise this asset having regard to the availability of funding with the objective of maximising Caledonia’s net present value per share. I anticipate the feasibility study will take 12 to 14 months to complete.”

Bilboes has produced approximately 288,000 ounces of gold since 1989.

“In the short term, I expect ore production from the Bilboes oxides will commence in early February and we anticipate beginning to recover gold from the heap leach from March,” Learmonth says.

Caledonia said last year that it planned to invest US$250 million into developing Bilboes into a new mine. The company, in its latest announcement, says it is considering a phased development which would minimise the initial capital investment and reduce the need for third-party funding.

The company has been aggressive on acquisitions as it looks to grow its portfolio beyond Blanket Mine.

In 2020, Caledonia bought Pan African Mining’s Maligreen gold claims near Gweru. Maligreen is estimated to host an inferred mineral resource of approximately 940,000 ounces of gold. In November, Caledonia bought Motapa Mine from Metallon’s Bulawayo Mining Company.

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