NYSE- and Aim-listed gold miner Caledonia Mining has reported that it has been making good progress on the feasibility study for the Bilboes project, in Zimbabwe, with the support of DRA Projects and other technical consultants.

While the feasibility study was initially targeted for completion in the first quarter of this year, the company says it has decided to extend the timeline to fully explore several material optimisation opportunities that have the potential to enhance project economics and reduce upfront capital requirements.

Caledonia says the feasibility study will supersede the preliminary economic assessment released on June 3, 2024, which outlined attractive project economics and a mine plan capable of tripling Caledonia’s gold production and positioning the company as an intermediate gold producer.

Encouragingly, ongoing work continues to confirm the project’s attractive fundamentals. Against the backdrop of a strong gold price, Bilboes remains both compelling and financeable, the company says.

Key areas of optimisation currently 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 in the first few years of production.

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

Lastly, Caledonia is also looking at 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.

The company says exploration at Motapa, which is located directly adjacent to Bilboes, 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 at Motapa 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 says the board remains fully committed to maximising shareholder value: this means ensuring that Bilboes is optimised both 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.

“Bilboes has the potential to be truly transformative for Caledonia and the work we are doing now is about making sure we get it right. We are encouraged by the results to date and are taking a disciplined approach to optimisation, both to enhance returns and to ensure we can fund the project in the most efficient way possible. 

“With strong exploration results at Motapa, promising developments at Blanket, and supportive market conditions, we remain confident in Bilboes’ ability to significantly reshape Caledonia’s growth profile,” says CEO Mark Learmonth.