Caledonia Mining Corporation Plc (NYSE AMERICAN: CMCL) has successfully completed the acquisition of a large gold deposit in Zimbabwe and anticipates it will be a strong addition to the company’s portfolio.
On Friday, the Saint Helier-based mining company announced news of obtaining the Bilboes gold project in a deal originally drafted in July last year.
The latest feasibility study conducted at Bilboes prior to completion of the transaction indicated the potential for an open-pit gold mine producing about 168,000 ounces of gold annually over a 10-year period and Caledonia says it will be orchestrating its own feasibility study to determine the best means of optimizing shareholder returns.
Under previous management only a limited amount of open-pit mining has taken place at the site and since 1989 the Bilboes project has only generated 288,000 ounces of gold.
“Now that the Transaction has completed, Caledonia will commission its own feasibility study to identify the most appropriate way to commercialise this asset having regard to the availability of funding with the objective of maximising Caledonia’s net present value per share. I anticipate the feasibility study will take 12 to 14 months to complete,” said Caledonia’s CEO Mark Learmonth.
Caledonia announces that it has today completed the acquisition of Bilboes Gold. “Completion of the Transaction is the cornerstone in our strategy to create a mid-tier, multi-asset gold producer focused on Zimbabwe.” Says CEO #zimbabwe #gold #goldmining
— Caledonia Mining Plc (@CaledoniaMining) January 6, 2023
Following completion of the transaction, Caledonia will be paying the project’s former owner, Bilboes Holdings, approximately 5.1 million shares and a one per cent net smelter royalty on revenue generated from the project. Those shares will be worth approximately US$66 million at about US$12.80 a piece.
Caledonia says the site has mineral reserves containing a total of approximately 1.96 million ounces of gold.
“The acquisition of Bilboes should be seen in the context of the successful implementation of the Central Shaft project at Blanket Mine, which is now producing at its target production rate of 80,000 ounces per annum,” added Learmonth.