Eight Zimbabwean financial institutions participate in financing package as miner advances major gold development
Caledonia Mining Corporation Plc has secured a US$150 million syndicated interim financing facility involving eight Zimbabwean financial institutions, providing a significant funding milestone for the development of its Bilboes Gold Project in Matabeleland North, Mining Zimbabwe can report.
By Rudairo Mapuranga
The agreement, signed by Caledonia’s subsidiary, Caledonia Holdings Zimbabwe (Private) Limited, brings together Stanbic Bank Zimbabwe Limited and CBZ Bank Limited, acting through CBZ Capital, as mandated lead arrangers.
The other participating institutions are Central African Building Society (CABS), FBC Bank Limited, FBC Crown Bank Limited, First Capital Bank Limited, NMB Bank Limited and ZB Bank Limited.
The facility is structured into two tranches: a revolving credit facility of up to US$50 million and a term facility of up to US$100 million. It is intended to provide interim funding for Bilboes as Caledonia progresses towards securing longer-term project finance for the development.
Facility A, the revolving credit component, carries an interest rate of the Secured Overnight Financing Rate (SOFR) plus 8.10% per annum. It has a 36-month term from its effective date, with an option for a one-year extension.
Facility B, the US$100 million term component, carries an interest rate of SOFR plus 7.90% per annum. It has an 18-month availability period, with a pause on capital repayments during that period. Amounts drawn will subsequently be repaid through quarterly instalments. The facility also provides for an accordion option that could increase its size by a further US$50 million, subject to the relevant arrangements.
Access to the financing remains subject to contractual conditions, including additional hedging arrangements to match the tenor of the facility. The US$150 million represents the total facility commitment and should not be interpreted as confirmation that the entire amount has already been drawn.
The financing is designed to bridge Bilboes’ development requirements while Caledonia pursues a separate, longer-term project financing package with regional and international financial institutions.
A key feature of the interim funding strategy is its reliance on cash flows from Blanket Mine, Caledonia’s existing Zimbabwean gold operation, as the financial backing for the borrowing. This allows the company to use the earnings capacity of its producing asset to support early development expenditure at Bilboes while the longer-term financing structure is being finalised.
The arrangement also follows a gold price hedging programme introduced in December 2025, covering 3,000 ounces per month from January 2026 to December 2028 at a minimum price of US$3,500 per ounce. The programme is intended to provide greater certainty over Blanket’s cash receipts during the period of significant capital investment at Bilboes, while allowing Caledonia to benefit from higher gold prices.
The interim facility and hedging programme complement the US$150 million convertible senior notes offering completed in January 2026, which generated approximately US$130 million in net proceeds after associated costs.
Together, the arrangements form three components of Caledonia’s four-part funding strategy, with the remaining component being longer-term project finance secured against Bilboes.
Bilboes Development and Production Outlook
The financing comes as Caledonia advances preparations for Bilboes, one of Zimbabwe’s major undeveloped gold deposits and the company’s principal growth project.
The feasibility study published in November 2025 outlines a project expected to produce approximately 1.55 million ounces of gold over a 10.8-year mine life, with first production targeted for late 2028. Production in the first full year, 2029, is projected at approximately 200,000 ounces.
The development involves an open-pit mining operation supported by a processing plant incorporating BIOX technology, which is designed to treat refractory gold ore. The project is expected to substantially expand Caledonia’s production profile beyond its existing operations at Blanket.
Caledonia has indicated that initial groundworks are underway, with major construction planned across 2027 and 2028. Procurement of long-lead equipment and engineering preparations form part of the work required to maintain the targeted development schedule.
Commenting on the financing milestone, Chief Executive Officer Mark Learmonth said the company had substantially advanced its four-pillar funding strategy through the completion of the hedging programme, convertible notes offering and interim financing facility.
He acknowledged the support of Stanbic Bank and CBZ Bank as mandated lead arrangers, together with the other participating lenders, saying the financing demonstrated the company’s ability to access capital through different funding channels.
The completion of the interim facility provides an important bridge for Bilboes’ development, although securing the longer-term project financing remains a key outstanding requirement as Caledonia moves towards construction and its targeted first gold production in late 2028.
