Caledonia gives go-ahead to Bilboes after feasibility study shows $580m NPV

Caledonia Mining Corporation decided on 25 November 2025 to proceed with its Bilboes gold project in Zimbabwe after publishing a feasibility study that describes a large, high-margin open-pit mine with a short payback period.

The study envisages production of about 1.55 million ounces over a 10.8-year life, with first gold expected in late 2028. At a gold price assumption of $2,548 an ounce, it gives a post-tax net present value of roughly $580 million at an 8% discount rate, an internal rate of return above 32% and a payback of about 1.7 years. All-in sustaining costs are estimated at $1,061 an ounce.

Reserves and processing

Proven and probable reserves stand at 1.75 million ounces in 24.1 million tonnes grading 2.26g/t. Beyond the reserves, the study reports measured and indicated resources of 532,000 ounces and inferred resources of 984,000 ounces, which point to upside if they can be converted. Because much of the Bilboes ore is refractory, Caledonia selected BIOX bacterial oxidation technology to liberate the gold before leaching.

The company evaluated a phased build but concluded that a single-phase, larger operation offered better economics through scale. That choice raises the upfront bill: peak funding is estimated at $484 million, and Caledonia put associated financing costs at about $100 million.

How it will be paid for

Caledonia's plan is to fund Bilboes mainly with non-recourse senior debt, supported by cash from its Blanket mine. It also outlined a three-year gold hedge with a minimum strike price of $3,500 an ounce, which it estimated could contribute around $200 million of cash flow. Construction was scheduled to begin in the second half of 2026, subject to finalising debt.

Chief executive Mark Learmonth told Proactive that the cost profile meant Bilboes would be "a very high-margin operation with a very quick payback period".

Caledonia bought Bilboes in January 2023 in an all-share transaction worth roughly $65 million at the time, plus a 1% net smelter royalty. The feasibility study marks the point at which the acquisition turns from an exploration bet into a development commitment.

A step change for Zimbabwe's formal gold sector

If built as planned, Bilboes would dwarf Blanket, which produces around 80,000 ounces a year. A large, industrial operation of this kind would broaden Zimbabwe's formal production base and bring a new source of export earnings. The key risks are financing a project of this scale in Zimbabwe and executing a refractory-ore processing plant on time and on budget.

Sources

• Proactive Investors: Caledonia Mining greenlights Bilboes Project after robust feasibility results, 25 Nov 2025
• GlobeNewswire (company release): Caledonia Mining Corporation Plc: Publication and Highlights of the Feasibility Study for Bilboes Gold Project, 25 Nov 2025

Photo: A 400-troy-ounce gold bar of the kind used in bank reserves. Szaaman, Wikimedia Commons, Public domain.