Caledonia completes Bilboes gold project acquisition in Zimbabwe

Caledonia Mining Corporation has announced that, following the satisfaction of conditions precedent, it has completed the acquisition of Bilboes Gold.

Bilboes is the parent company which owns, through its Zimbabwe subsidiary, Bilboes Holdings, the Bilboes gold project in Zimbabwe.

As a reminder, the total consideration payable is, subject to adjustment, 5,123,044 shares representing approximately 28.5 per cent of Caledonia’s fully diluted share capital and a 1 per cent net smelter royalty on the project’s revenues.

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.


  • Bilboes is a large, high grade gold deposit located approximately 75 km north 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 Moz of gold in 26.64 Mt at a grade of 2.29 g/t and measured and indicated mineral resources of 2.56 Moz of gold in 35.18 Mt at a grade of 2.26 g/t and inferred mineral resources of 577,000 oz of gold in 9.48 Mt at a grade of 1.89 g/t. The project has produced approximately 288,000 oz of gold since 1989.
  • A feasibility study prepared by the vendors indicates the potential for an open-pit gold mine producing an average of 168,000 oz 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.
  • 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.
  • Under the Transaction, 5% 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.

Furthermore, 441,095 of the total consideration shares that would have been issued to Toziyana will be withheld by Caledonia to be issued to Shining Capital in settlement of a separate commercial arrangement between Toziyana’s holding company and Shining Capital’s subsidiary Infinite Treasure. The issue of the Escrow Shares to Shining Capital is subject to Reserve Bank of Zimbabwe approval for the commercial arrangement between Toziyana’s holding company and Infinite Treasure.

Accordingly, following today’s completion, 4,425,797 new shares in Caledonia are being issued to the sellers of Bilboes and up to 697,247 additional shares comprised of Deferred Shares and Escrow Shares will be issued in due course, at which time further announcements will be made.

The number of completion shares being issued to the sellers of Bilboes is therefore as follows:

Following the issue of completion shares, Caledonia will have a total number of shares in issue of 17,258,923 common shares of no par value each. Caledonia has no shares in treasury; therefore, this figure may be used by holders of securities in the company as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, the company.

Application has been made by Caledonia for the admission of depositary interests representing the completion Shares to trading on AIM and it is anticipated that trading in such securities will commence on January 11, 2023.

Pursuant to the terms of the Transaction, Victor Gapare, who is affiliated with Toziyana, has been appointed as an Executive Director with effect from today. Victor obtained a Masters in Business Leadership degree (MBL) from the University of South Africa in 1999 and a Bachelor of Business Studies honours degree (BBS Hon) from the University of Zimbabwe in 1986. Victor was previously the Operations Director for the gold and pyrites business of Anglo American Corporation Zimbabwe when Bilboes was part of its portfolio and is a former President of the Chamber of Mines Zimbabwe. He has been the CEO of Bilboes Holdings since the management buyout of Bilboes from Anglo American Corporation Zimbabwe in 2003.

Commenting on the announcement, Mark Learmonth, CEO, said:

“Completion of the Transaction is the cornerstone in Caledonia’s strategy to create a mid-tier, multi-asset gold producer focussed on Zimbabwe.

“Bilboes is a large, high-grade sulphide deposit which is amenable to low-cost, open-pit operations. A FS on the Bilboes project which has been prepared by the Bilboes vendors envisages production of approximately 168,000 oz of gold per annum over a 10-year life. 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.

“In the short term, I expect ore production from the Bilboes oxides will commence in early February and we anticipate beginning to recover gold from the heap leach from March.

“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 ozpa, and the acquisitions of the exploration projects at Maligeen and Motapa. We recently announced an upgrade to the existing mineral resource base at Maligreen. Motapa is at a much earlier stage but, given its large size, its attractive geological prospectivity and its contiguity with Bilboes we believe it is a highly attractive addition to our portfolio.

“I look forward to working with Victor and in particular developing Bilboes and other investments in Zimbabwe with him and the rest of the management team on behalf of Caledonia.”

Caledonia’s Chairman, Leigh Wilson, also commented on the announcement, saying:

“I am very pleased the acquisition of Bilboes has been completed. I extend my appreciation to the Bilboes vendors and their advisors for their active assistance in closing what has been a complex deal, and in particular to Victor Gapare who has been closely involved with Caledonia management in satisfying a number of key conditions to the transaction.

“It is my pleasure to welcome Victor to the Caledonia Board. His extensive knowledge of both the project itself and, more broadly, of mining in Zimbabwe is an invaluable addition to the board.”

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