Operations
Bilboes
On 6 January 2023, Caledonia announced that it had completed the acquisition of Bilboes Gold Limited for a total consideration of 5,123,044 Caledonia
shares representing approximately 28.5 per cent of Caledonia’s fully diluted
equity, and a 1 per cent net smelter royalty the Project’s revenues.
The Feasibility Study, announced in November 2025, confirms that the Project has robust economics, delivering 1.55 Moz over 10.8 years with first production expected in late 2028.
Based on the last trading day’s closing share price on NYSE American of US$12.82 per share, the value of the maximum number of new shares that could be issued as consideration if there is no adjustment is currently US$65,677,424.
Highlights
- Bilboes is a large, high grade gold deposit located approximately 75 kmnorth of Bulawayo, Zimbabwe. Historically, it has been subject to a limited amount of open pit mining.
- The Project has NI43-101 compliant proven and probable mineral reserves of 1.96 million ounces of gold at a grade of 2.29 g/t and measured and indicated mineral resources of 2.56 million ounces of gold at a grade of 2.26 g/t and inferred mineral resources of 577,000 ounces of gold at a grade of 1.89 g/t. The Project has produced approximately 288,000 ounces of gold since 1989.
- A feasibility study prepared by the vendors (DRA) indicates the potential for an open-pit gold mine producing an average of 168,000 ounces per year over a 10-year life of mine.
- Caledonia will conduct its own feasibility study to identify the most judicious way to commercialise the Project to optimize shareholder returns. One approach that will be considered is a phased development which would minimise the initial capital investment and reduce the need for third party funding.
- Prior to completion of the Transaction, Caledonia will enter a tribute arrangement with Bilboes Holdings so that oxide operations can be re-started with the expectation that Bilboes Holdings will return to profitable operations within 6 months. This also has the benefit of an element of pre-stripping for the main development of the Project.
- The Transaction is subject to several conditions including:
- that Bilboes Holdings receives confirmation from the Zimbabwe authorities that it will, for the life of the mine, be able to export gold directly and to retain 100 per cent of the sale proceeds in US dollars with no requirement to convert US dollar gold revenues into domestic currency; and
- an arrangement with or confirmation from the Zimbabwe authorities and/or an independent power producer regarding the future availability of a sufficiently reliable and affordable electricity supply to the Project.
- Caledonia will, subject to satisfaction of conditions and any customary adjustments to the purchase price to account for any extraordinary liabilities incurred before completion, purchase Bilboes Gold Limited for a consideration to be settled by the issue to the sellers of 5,123,044 new shares in Caledonia and a 1 per cent NSR on the Project’s revenues.
Transforming Caledonia’s Future
On 25 November 2025, Caledonia announced its decision to proceed with the Bilboes Gold Project following the successful completion of our comprehensive feasibility study. This milestone represents a defining moment in Caledonia’s evolution toward becoming a mid-tier gold producer.
Project Overview
Location: Matabeleland North Province, Zimbabwe (80km north of Bulawayo)
Ownership: 100% Caledonia ownership
Status: Fully permitted and ready for development
Resource Base
- Proven & Probable Reserves: 1.749 Moz at 2.26 g/t
- Measured & Indicated Resources: 532,000 oz at 1.37 g/t
- Inferred Resources: 984,000 oz at 1.62 g/t
Production Profile
Key Metrics
- Life of Mine Production: 1.55 Moz over 10.8 years
- First Full Year (2029): ~200,000 oz
- Plant Throughput: 240kt/month (years 1-6), 180kt/month thereafter
- All-in Sustaining Cost: US$1,061/oz
- Metallurgical Recovery: 83.6% to 88.9%
Technology
BIOX® Processing: Advanced bacterial pre-treatment technology for refractory ore processing, proven successful in similar global projects.
Financial Highlights
- Economic analysis results, as extracted from the TRS:
The Project generates a value accretive business case in all three of the gold price scenarios evaluated:
| Metric | Unit | Consensus Forecast Price | 3-Year Trailing Average Price | Spot Price |
|---|---|---|---|---|
| Gold Price (Ave) | US$ / oz (Real) | 2,548 | 2,350 | 3,648 |
| Post-Tax NPV 8% Real | US$ M | 582 | 454 | 1,234 |
| Post-Tax IRR | % Real | 32.5 | 27.4 | 50.4 |
| Payback Period[1] | years | 1.7 | 2.8 | 1.1 |
| Peak Funding Required | US$ M (Real) | 484 | 484 | 484 |
| Value-Investment Ratio | ratio | 1.2x | 0.9x | 2.6x |
| Life of Mine (Active Years) | years | 10.8 | 10.8 | 10.8 |
| Operating Margin | % Real | 59.5 | 56.5 | 70.2 |
Caledonia Advances Multi-Stage Funding Strategy for Bilboes Gold Project
In January 2026 Caledonia provided an update on the structured, multistage funding strategy to support the development of the Bilboes gold project in Zimbabwe.
Successful US$150 Million Convertible Notes Offering
The Company had successfully closed a US$150 million, 7-year convertible senior notes offering, which received exceptional support from U.S. institutional investors. Strong demand of over US$600 million after just three days of marketing led to the offering being increased from an initial US$100 million to US$125 million, with an additional US$25 million raised through the exercise of the initial purchasers’ option.
Comprehensive Four-Part Funding Plan
Following the publication of the Bilboes Feasibility Study in November 2025, Caledonia implemented a strategic funding plan to advance the project while maintaining financial discipline:
Gold Price Hedging Programme
- In December 2025, Caledonia purchased put options to lock in a minimum gold price of US$3,500 per ounce over 3,000 ounces per month from January 2026 to December 2028. The hedging arrangements are designed to underpin cash receipts by Caledonia from Blanket Mine over the next three years from January 1, 2026 to December 31, 2028, which broadly coincides with the peak capital investment period for the Bilboes gold project.
- The minimum price is also expected to enhance project lenders’ willingness to provide credit.
Convertible Notes Offering
- Caledonia has raised gross proceeds of US$150 million from the Convertible Notes Offering.
- The Notes carry a 5.875% coupon and holders can convert on or after October 15, 2032 subject to standard early conversion and redemption provisions.
- The purchase of capped call options by Caledonia in conjunction with the Convertible Notes Offering significantly reduces the potential economic dilution to the Company’s shareholders by increasing the effective conversion price of Notes from a strike price of approximately US$40.51 per share (a premium of 25% to the closing share price on January 14, 2026) to an effective conversion price of approximately US$56.72 per share (a premium of 75% to the closing share price on January 14, 2026).
- The total cost of the capped call options structure was approximately 10% of the gross proceeds of the Convertible Notes.
- The capped call transactions are expected generally to compensate (through the payment of cash to Caledonia or, if certain conditions are met, delivery of shares to Caledonia) for potential economic dilution upon any conversion of the Notes and/or offset any cash payments Caledonia is required to make in excess of the principal amount of converted Notes, as the case may be, with such compensation and/or offset subject to a cap.
- After underwriting fees and related issuance expenses and the cost of the capped call derivative structure, Caledonia received net proceeds of approximately US$130 million.
Interim Funding Facility
- In November 2025, Caledonia launched a process to arrange an interim funding facility of up to US$150 million with a consortium of Zimbabwean and South African commercial banks (the “Interim Funding Facility”).
- Following encouraging engagement with the banks, the Company expects that this Facility can be in place by mid-2026, subject to the usual lender processes. Further announcements will be made in due course.
- Robust price protection from the hedging programme should support the size and structure of this Facility, which will be secured against Caledonia’s cash flow from Blanket Mine.
Project Finance
- Caledonia has had ongoing preliminary discussions with regional and global financial institutions to explore the scope and structure of project finance to support the construction of the Bilboes gold project.
- Caledonia will commence a formal process in the first quarter of 2026. This process is expected to take a year or more as project financiers undertake independent assessments of the mineral resources at Bilboes and the Bilboes Feasibility Study.
Project Timeline
The integrated funding strategy, combined with ongoing Blanket Mine cash generation, provides the liquidity needed to begin procuring long-lead equipment in Q3 2026. The Company remains confident in delivering the project within the timeframe outlined in the Bilboes Feasibility Study.