Caledonia Mining has agreed to acquire Bilboes Gold, which owns the Bilboes gold project in Zimbabwe, in a deal worth around $53.3m.
As consideration, Caledonia Mining will issue 5.1 million of its shares to Bilboes Gold along with a net smelter royalty (NSR) of 1% on the project’s revenues. The shares to be issued represent nearly 28.5% of Caledonia Mining’s fully diluted equity.
Bilboes Gold is owned by Toziyana Resources (50%), Baker Steel Resources Trust (24%), and Infinite Treasure (26%).
The Bilboes gold project is located nearly 75km north of Bulawayo. It was historically subject to a limited amount of open pit mining.
The project was previously owned and explored by Anglo American before its exit from the gold sector in Zimbabwe in 2003. It has a total land package made up of mining claims spanning 6,870ha and exclusive prospecting orders that come to around 92,000ha.
The Bilboes gold project had produced nearly 288,000 ounces of gold since 1989 of which around 90,000 ounces were drawn by the present owners.
It has proven and probable mineral reserves of 1.96 million ounces of gold at a grade of 2.29 g/t. The project’s measured and indicated mineral resources are 2.56 million ounces of gold at a grade of 2.26 g/t, while inferred mineral resources are 577,000 ounces of gold at a grade of 1.89 g/t.
Bilboes Gold had also executed a total of 93,400m of drilling over a total strike length of 7.4km. Nearly 60% of the drilling was diamond core drilling.
Caledonia Mining CEO Mark Learmonth said: “This is a transformational asset for Caledonia, as we embark on the next step in our journey to become a multi-asset, mid-tier gold producer.
“Once in full production (which will be subject to financing of the capex) Caledonia’s management believes that Bilboes could produce three times our current 64 per cent attributable share of gold production from Blanket, resulting in production from the enlarged Caledonia group being potentially four times its current size.”
Caledonia Mining said that it will carry out its own feasibility study for identifying the most judicious way to commercialise the Bilboes gold project to optimise shareholder returns.
In September 2021, Caledonia Mining signed a deal to acquire the Maligreen project in Zimbabwe from Pan African Mining for $4m.
