Name of the Project
Bilboes sulphide gold project.

Location
About 75 km north of Bulawayo, in Zimbabwe.

Project Owner/s
Gold miner Caledonia Mining Corporation.

Project Description
A preliminary economic assessment (PEA) has reconfirmed that Bilboes is a high-quality midscale asset that can generate attractive economic returns. 

The assessment of the project, completed in May 2024, is a culmination of optimised studies having been done on the project since January 2023, when Caledonia acquired Bilboes. 

The PEA has determined that a single-phase development will provide improved cash generation, allowing for a lower cost of capital, owing to enhanced debt financing capacity, compared with phased development alternatives.  The PEA envisages total production of 1.52-million ounces over a ten-year mine life.

The main change to the project development plan pertains to the proposed construction of the tailings storage facility (TSF), which will now be built on a modular basis to reduce the initial capital expenditure and, therefore, improve the economic returns. The revised approach to the TSF constitutes a “significant change” to the project and requires the preparation of an entirely new technical and economic study. 

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The PEA estimates a net present value, at a 10% discount rate, of $309-million and an internal rate of return of 34%, with a payback of 1.9 years.

Capital Expenditure
$403-million.

Planned Start/End Date
Not stated.

Latest Developments
Caledonia Mining is making good progress on the feasibility study, with the support of DRA Projects and other technical consultants.

The study was initially targeted for completion in the first quarter of this year, but the company decided to extend the timeline to fully explore several material optimisation opportunities, which can enhance project economics and reduce upfront capital requirements. The feasibility study will supersede the PEA.

Ongoing work continues to confirm the project’s attractive fundamentals. 

Key areas of optimisation under review include engaging with the authorities to explore the potential sale of concentrate, which could significantly reduce upfront capital expenditure (capex) by deferring the capex on a BIOX processing circuit, at least during the first few years of production.

The company is also evaluating the potential relocation of the TSF to a more efficient site, including on Caledonia’s Motapa property, adjacent to Bilboes, where the topography could lead to lower initial construction costs.

Further, Caledonia is considering incorporating near-term opportunities at Motapa into the Bilboes feasibility study, following strong exploration results in 2024, and the additional exploration and development work planned at Motapa this year.

Exploration at Motapa has been particularly promising, indicating the presence of new mineralised zones within a few hundred metres of the proposed Bilboes processing plant. Demonstrating significant resource additions, it has the potential to materially improve the long-term economics of a combined Bilboes-Motapa project.

In addition, Caledonia continues to assess near-term revenue opportunities across its portfolio.

In particular, high-grade mineralisation recently identified at the company’s flagship Blanket mine could make a meaningful contribution to the initial capital requirements for Bilboes, providing further flexibility around funding.

Caledonia has said the board remains fully committed to maximising shareholder value, which means ensuring that Bilboes is optimised technically and financially, while continuing discussions with funding partners and relevant authorities in Zimbabwe.

The optimisation work is advancing well and the company will provide a further update on the expected timing of the feasibility study in due course.

Key Contracts, Suppliers and Consultants
DRA Projects (PEA).

Contact Details for Project Information
Caledonia Mining, tel +44 1534 679800 or email info@caledoniamining.com.