Caledonia Mining Corporation has completed a $150 million convertible bond offering, providing the first major tranche of funding for the development of its flagship Bilboes gold project in Zimbabwe, which is expected to become the country’s largest gold mine.
The bond issue, completed on January 20, was originally marketed at $100 million but was increased to $150 million after attracting strong demand from U.S. institutional investors. Market sources said total subscriptions exceeded $600 million.
The bonds carry a coupon of 5.875% and mature in January 2033. Proceeds will be used to fund early-stage development at Bilboes and to finance capped call options intended to limit shareholder dilution should Caledonia’s share price rise substantially.
The bond offering represents the first pillar of a four-stage financing strategy for the Bilboes project, which has an estimated total capital requirement of approximately $584 million.
In parallel, Caledonia is arranging a $150 million interim banking facility with a consortium of Zimbabwean and South African commercial banks. The facility is expected to be finalised by mid-2026 and will support liquidity during the construction phase.
To protect project economics during development, the company has also implemented a gold hedging programme, locking in a minimum gold price of $3,500 per ounce for 3,000 ounces per month from January 2026 through December 2028. A formal project finance process is scheduled to commence in the first quarter of 2026 to secure the remaining funding.
Bilboes set to become Zimbabwe’s largest gold mine
The Bilboes project is expected to enter production in late 2028 and reach steady-state output of approximately 200,000 ounces of gold per year from 2029. Once operational, it is forecast to be the largest gold mine in Zimbabwe.
Bilboes hosts NI 43-101 compliant proven and probable reserves of about 1.96 million ounces of gold, positioning the asset as a long-life operation central to Caledonia’s long-term growth strategy in southern Africa.
Zimbabwe gold output hits record high
Caledonia’s expansion comes as Zimbabwe’s gold sector posts record production. Data from Fidelity Gold Refinery, the country’s sole gold buyer, shows national output reached a record 46.7 metric tonnes in 2025, up 17% from 2024.
Small-scale and artisanal miners produced 34.9 tonnes, while large-scale mines contributed 11.8 tonnes. Gold remains Zimbabwe’s largest foreign currency earner, generating $3.76 billion in export receipts in the first ten months of 2025, supported by elevated global gold prices.
Blanket Mine meets guidance
Meanwhile, Caledonia’s existing Blanket Mine produced 76,213 ounces of gold in 2025, in line with company guidance.
For 2026, Caledonia has forecast production of between 72,000 and 76,500 ounces, while cautioning that operating costs are likely to rise due to power supply disruptions and inflationary pressures affecting labour and consumables.
Despite near-term cost pressures, the company said strong gold prices, steady performance at Blanket Mine and secured development funding for Bilboes position it for sustained long-term growth in Zimbabwe’s expanding gold sector.
