Caledonia Mining Corporation has signed an agreement to purchase 5,123,044 shares of Bilboes Gold Limited, representing approximately 28.5 percent of Caledonia’s fully diluted equity, and a 1 percent net smelter royalty (“NSR”) on the project’s revenues
Bilboes Gold Limited is the parent company that owns its local subsidiary, Bilboes Holdings Limited, which holds a large, high-grade gold deposit located approximately 75 km north of Bulawayo, Zimbabwe.
Historically, it has been subject to limited open pit mining.
Speaking on the announcement, the company CEO Mark Learmonth said this is a huge step towards Caledonia’s goal to achieve multi-asset, mid-tier gold production.
“We are delighted to have signed an agreement for the purchase of Bilboes, the premier gold development project in Zimbabwe, and indeed one of the best gold development projects in Africa.
“This is a transformational asset for Caledonia, as we embark on the next step in our journey to become a multi-asset, mid-tier gold producer. Once in full production (which will be subject to financing of the capex) Caledonia’s management believes that Bilboes could produce three times our current 64 per cent attributable share of gold production from Blanket, resulting in production from the enlarged Caledonia group being potentially four times its current size.
He added, “the acquisition of Bilboes will build on the recent acquisition of the Maligreen claims which host NI 43-101 compliant inferred mineral resources of 940,000 ounces of gold in 15.6 million tonnes at a grade of 1.88g/t1.”
This comes on the backdrop of the 2020 signing of a memorandum of understanding between the government and Caledonia which allowed the company to evaluate mining rights, properties and projects in the gold sector that are controlled by government.
Zimbabwe is targeting a US$ 12 billion mineral economy by 2023 and gold contribution is expected to be central constituting around 33 percent of total mining sector revenue.