Caledonia Mining has challenged international investor perceptions of Zimbabwe, arguing that the risks of operating in the country are overstated as it advances its US$600 million Bilboes gold project, Mining Zimbabwe can report.
By Ryan Chigoche
The London-listed gold producer, which has operated in Zimbabwe for two decades, used its capital markets presentation in New York to make the case that its experience navigating the country’s regulations, bureaucracy and foreign-exchange arrangements gives it a different perspective on the investment environment.
“Our long-term strategy is that we are 100% focused on Zim,” Caledonia Vice-President for Corporate Development Maurice Mason said at the presentation.
“We are experts operating in Zim and we think the country’s risk is significantly mispriced.”
For Caledonia, the argument is rooted in experience.
After 20 years of operating in Zimbabwe, the company believes it has developed an understanding of the systems that can make investment difficult for newcomers, allowing it to identify opportunities where international investors may see uncertainty.
That view is now being tested through Bilboes, a major gold development expected to produce about 200,000 ounces annually from 2029.
The project forms part of Caledonia’s strategy to expand its Zimbabwe operations and is being financed through a US$150 million seven-year convertible bond raised earlier this year.
Demand from US institutional investors exceeded US$600 million, providing a significant vote of confidence from international capital markets for a company whose growth strategy is concentrated in Zimbabwe.
The financing also underscores the distinction Caledonia is drawing between perceptions of country risk and the practical experience of operating in the country.
For Chief Executive Mark Learmonth, familiarity with Zimbabwe’s administrative processes has become an important part of the company’s operating model.
“There is a bureaucracy to go through to do things,” Learmonth said at the presentation.
“That’s simply just making sure that you press the right buttons in the right order.”
Caledonia was “very, very good at that” after years in the country, he said.
“It’s just process, it’s not an obstacle.”
The comments reflect the company’s view that Zimbabwe’s operating environment can be more manageable for miners with established local knowledge.
For an international investor assessing the country from outside, regulation and bureaucracy may appear as significant barriers to investment.
For Caledonia, those same processes are part of an environment it has spent years learning to navigate.
The company’s experience also extends to the movement of capital equipment.
Learmonth said Zimbabwean authorities had helped Caledonia move about US$15 million of equipment for Blanket Mine’s solar project through the border.
For a company developing a project of Bilboes’ scale, the ability to secure approvals and move equipment is an important part of the investment environment.
But Caledonia’s assessment of Zimbabwe also rests on the nature of its gold business.
Bilboes Chief Executive Victor Gapare, who has operated in Zimbabwe since 1987 and previously served as president of the Chamber of Mines, said Caledonia had never struggled to get money out of Zimbabwe because it received US dollars from its gold sales.
That exposure gives the company a different position from producers whose revenues and foreign-exchange arrangements have created more complicated cash-access challenges.
Zimbabwe’s foreign-currency retention system requires miners to surrender 30% of their dollar earnings into local currency.
Access to the local-currency equivalent has been a longstanding concern for mining companies, particularly those producing platinum-group metals.
Caledonia’s gold revenue structure and established operating relationships provide a different experience from producers that have faced delays accessing export proceeds.
The distinction is important to the company’s investment case.
Caledonia is not arguing that Zimbabwe’s broader foreign-exchange challenges have disappeared. Rather, it believes its gold revenue model and operating experience allow it to manage risks that may weigh more heavily on other investors.
That perspective has shaped the company’s decision to remain focused on Zimbabwe.
The Bilboes project is expected to produce about 200,000 ounces of gold annually from 2029, significantly expanding Caledonia’s Zimbabwe operations and placing the development at the centre of its growth strategy.
Its financing also points to continued international interest in Zimbabwe-linked mining opportunities, despite the country’s longstanding investment concerns.
The US$150 million convertible bond, backed by demand exceeding US$600 million, has provided Caledonia with capital to advance the project while making the case that Zimbabwe exposure does not automatically exclude a company from international funding markets.
For Caledonia, the question is not simply whether Zimbabwe carries risk, but how that risk is understood and managed.
