MINING REFINING

Caledonia Mining to advance lucrative Bilboes gold project with single-phase development plan

Mon June 03 2024

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) chief executive Mark Learmonth joined Proactive's Stephen Gunnion with an update on the company's Bilboes gold project in Zimbabwe.

Acquired in January 2023, the Bilboes assets have been under evaluation for the most effective commercialization strategy. The company has decided on a single-step development approach, projected to achieve an average annual production of 150,000 ounces of gold, peaking at nearly 200,000 ounces initially. This method offers the best increase in net present value (NPV) per share, estimated at over $300 million at a gold price of $1,884 and a 10% discount rate.

The single-phase approach requires peak funding of approximately $300 million, which coincidentally matches the NPV. Alternative phased approaches were deemed less favourable due to higher relative costs and reduced debt funding capacity. Learmonth emphasized the project's significant potential, noting that higher gold prices and lower discount rates could increase the project's value to nearly $1 billion.

The next steps include upgrading the current work to a feasibility study, with particular focus on the tailings facility, the largest capital expenditure component. This process, leveraging experience from the Blanket mine, aims to optimise costs through modular construction. Additionally, the company has engaged an advisor to explore debt financing options. These parallel processes are expected to continue into early next year, with feasibility studies and financing efforts progressing concurrently.

Source: https://www.proactiveinvestors.com.au