Caledonia to Invest US$300 Million, But Calls for Policy Stability
Listed gold producer Caledonia Mining Corporation has announced plans to invest US$300 million in its local operations, specifically in the Bilboes Sulphide Project. However, the company is calling for greater policy stability in the operating environment.
By Ryan Chigoche
Frequent changes in regulations, taxes, and ownership requirements create an unpredictable business environment, making long-term planning difficult. Moreover, inconsistencies in the application of these policies across different levels of government add to the confusion, further deterring potential investors.
Providing an update on the outlook of the company’s operations in Zimbabwe, Caledonia’s CEO, Mark Learmonth stated that the planned US$300 million investment hinges on achieving policy stability.
“We are planning to invest over $300 million in Zimbabwe. However, we need policy stability and consistency, particularly with respect to exchange rates, taxation, and exchange control/RBZ regulations. We can manage operational challenges, which are a normal part of mining investment,” Learmonth said.
This development comes as the company sets its immediate strategic focus on developing the Bilboes Sulphide Project while also maintaining production at Blanket Mine within the targeted range of 74,000 to 78,000 ounces for this year.
According to the company, the primary objective at Bilboes is to construct a large, multi-open-pit operation to extract sulphide mineralization.
The Bilboes gold project is expected to yield approximately 1.5 million ounces of gold (based on measured and indicated mineral resources) over a 10-year mine life at an all-in-sustaining cost of US$968 per ounce. The project has an estimated payback period of 1.9 years at a gold price of US$1,884 per ounce.
However, the investment in the project is also subject to the availability of debt funding.
“We can provide no guidance on timing, which will depend on the availability of funding and, in particular, the speed at which lenders can make debt funding available,” Learmonth added.
The company aims to complete the feasibility study on the Bilboes Sulphide Project, evaluate funding solutions, commence development of the project, and continue exploration activities at Motapa.
Caledonia Mining Corporation has reiterated that its immediate strategic focus is to maintain production at Blanket Mine at the targeted range of 74,000 to 78,000 ounces for 2024, while its primary growth priority is the Bilboes Sulphide Project.