Caledonia completes acquisition of Bilboes gold project

Judith Phiri , Business Reporter

VICTORIA Falls Stock Exchange (VFEX) listed resources group, Caledonia Mining Corporation Plc has announced that, following the satisfaction of conditions precedent, it has completed the acquisition of Bilboes Gold Limited.

Bilboes Gold Limited is the parent company which owns- through its Zimbabwe subsidiary- Bilboes Holdings (Private) Limited, the Bilboes gold project, which is a large, high grade gold deposit located approximately 75 km north of Bulawayo.
In a statement on Friday, Caledonia Mining Corporation Plc said following its announcement in July last year, Caledonia entered into a tribute arrangement with Bilboes Holdings when it entered into the share purchase agreement so that oxide operations could re-start.

“The tribute agreement is now unnecessary due to completion of the transaction and oxide operations are anticipated to start from February 2023 with the expectation that Bilboes Holdings will return to profitable operations shortly thereafter. This also has the benefit of an element of pre-stripping for the main development of the project,” reads part of the statement.

Under the transaction, five percent of the total consideration shares will be retained by Caledonia in order that any customary adjustments to the purchase price can be calculated after completion to account for any extraordinary liabilities incurred prior to completion. This calculation is expected to be completed in the next few weeks.

Commenting on the announcement, the chief executive officer (CEO) Mr Mark Learmonth said this was the cornerstone in Caledonia’s strategy.
“Completion of the transaction is the cornerstone in Caledonia’s strategy to create a mid-tier, multi-asset gold producer focused on Zimbabwe. Bilboes is a large, high-grade sulphide deposit which is amenable to low-cost, open-pit operations.

“A feasibility study on the Bilboes project which has been prepared by the Bilboes vendors envisages production of approximately 168 000 ounces of gold per annum over a 10-year life,” said Mr Learmonth.

“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.”

He said in the short term, they expect ore production from the Bilboes oxides to commence in early February and they anticipate beginning to recover gold from the heap leach as from March.
Mr Learmonth said 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 and the acquisitions of the exploration projects at Maligeen and Motapa.