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Strategic capital raise, upsized due to strong demand, provides flexible long-term funding for the gold producer’s ambitions.
Caledonia Mining Corporation Plc (NYSE American, AIM, and VFEX: CMCL) has successfully closed a significant and upsized offering of US$150 million in convertible senior notes, marking a major vote of confidence from institutional investors and strengthening its balance sheet for future growth initiatives, Mining Zimbabwe can report.
By Rudairo Mapuranga
The company announced the closing of its offering of 5.875% Convertible Senior Notes due 2033, which was increased from its initial target due to what the company described as an “outstanding response” from high-quality U.S. institutional investors. The offering included the full exercise of the initial purchasers’ option to buy an additional US$25 million in notes.
“We are extremely pleased with the outstanding response… which is a tremendous endorsement of Caledonia and the progress we have made as a business,” said Mark Learmonth, Chief Executive Officer of Caledonia. “This successful offering gives us a strong, flexible source of long-term capital and reflects the confidence investors have in our management team, our track record of delivery, and the growth potential of the Company.”
The notes carry a semi-annual cash interest coupon of 5.875% and will mature on January 15, 2033, unless converted, redeemed, or repurchased earlier. Holders have the right to convert their notes into Caledonia’s common shares at a conversion price of approximately US$40.51 per share. This price represents a premium of about 25% over the last reported sale price on the NYSE American as of January 14, 2026.
A critical component of the transaction is Caledonia’s concurrent purchase of capped call options. These financial instruments are designed to reduce potential dilution to existing shareholders upon conversion of the notes. The capped calls have a strike price equal to the notes’ conversion price and a cap price of approximately US$56.72 per share—a 75% premium to the reference share price.
“The potential economic dilution upon conversion of the Notes was mitigated through the purchase of cash-settled capped call options,” the company stated, noting it paid approximately US$14.4 million for these options.
The substantial influx of capital provides Caledonia with enhanced financial flexibility to advance its long-term strategic objectives. While the press release did not specify individual projects, the proceeds are expected to be used to fund growth initiatives, which may include exploration, development, or strategic acquisitions, alongside general corporate purposes.
The robust demand for the offering signals strong institutional belief in Caledonia’s operational track record and its growth narrative within the gold sector. The structure of the deal—a convertible note with anti-dilutive protections—allows the company to secure cost-effective capital while aligning the interests of new investors with those of existing shareholders.
Cantor Fitzgerald & Co. acted as the sole manager and capped call coordinator for the offering. Caledonia has indicated it will look to build on this momentum as it continues to execute its corporate strategy.
