After successfully closing a $150-million seven-year convertible senior note offering, gold miner Caledonia Mining Corporation says it will start ordering long lead-time equipment for the Bilboes project, in Zimbabwe, in the third quarter of the year.

The company will also start a formal project finance process to support the full development of Bilboes towards large-scale and long-life production.

Caledonia plans to spend $132-million on Bilboes this year.

The note offering was upsized from $100-million to $125-million following exceptional demand and by another $25-million when initial note buyers exercised the option of buying more notes.

“Investor demand exceeded $600-million after three days of marketing,” says CEO Mark Learmonth.

The Bilboes feasibility study outlines a four-part funding plan designed to ensure the project can be advanced at pace while maintaining prudent capital discipline.

The plan comprises a gold price hedging programme, with Caledonia having bought put options to lock in a minimum gold price of $3 500/oz over 3 000 oz a month from January this year to December 2028.

The hedging, which was announced in December 2025, is designed to underpin cash receipts by Caledonia from the Blanket mine, also in Zimbabwe, over the next three years, which broadly coincides with the peak capital investment period for the Bilboes project.

The funding comprises the note offering and capped call options – the latter of which compensate for potential economic dilution upon any conversion of the notes and offset any cash payments Caledonia is required to make in excess of the principal amount of converted notes, with such compensation offset being subject to a cap.

The third funding phase encompasses an interim funding facility, with Caledonia having launched a process to arrange an interim funding facility of up to $150-million in November with a consortium of Zimbabwean and South African commercial banks.

Caledonia expects this facility to be in place by mid-2026, subject to the usual lender processes. Learmonth explains that robust price protection from the hedging programme should support the size and structure of this facility, which will be secured against Caledonia’s cash flow from the Blanket mine.

Lastly, Caledonia has had ongoing preliminary discussions with regional and global financial institutions to explore the scope and structure of finance that will support construction of the Bilboes project.

The company plans to start a formal process in the first quarter of the year in this regard, with the process being expected to take a year or more as project financiers undertake independent assessments of the mineral resources at Bilboes.

The feasibility study envisions first production late in 2028 and steady-state output of 200 000 oz/y from 2029 for ten years. Bilboes is poised to deliver 1.5-million ounces of gold in total, for a peak capital cost of $484-million.

“The four-part funding strategy, combined with ongoing cash generation from Blanket mine, has been designed to maintain adequate liquidity throughout the initial phase of the Bilboes gold project and should enable the business to begin procuring long lead equipment early in the third quarter of 2026.

“Based on this approach, we believe the project will be developed within the timetable set forth in the Bilboes feasibility study,” Learmonth concludes.