Bilboes acquisition bolsters Caledonia operations

THE completion of the acquisition of Bilboes Gold Limited by Caledonia Mining Corporation, which owns Blanket Gold Mine in Matabeleland South, has consolidated the company’s expansion drive with production at the new outfit expected to commence next month.

Now under the giant Victoria Falls Stock Exchange-listed group, Bilboes is projected to produce an average of 168 000 ounces per year over a 10-year lifespan of the mine.
Bilboes Gold is a gold mining entity that owns three major gold mines in Matabeleland North, 75km north of Bulawayo, and was once ranked among the country’s 10 biggest gold producers. It has produced approximately 288 000 ounces of gold since 1989.

Victoria Falls Stock Exchange

The acquisition of the lucrative asset, previously estimated at US$53,2 million, is part of Caledonia’s relentless expansion drive of becoming a multi-asset gold producer. Last year, Caledonia expanded its footprint by purchasing Motapa Mining Company UK Limited from Bulawayo Mining Company Limited, a privately owned UK company.

Officials said they will continue to evaluate investment opportunities in Zimbabwe and elsewhere saying investing in Zimbabwe is profitable, as the country’s business environment presents a huge opportunity for its operations to evolve into a multi-asset gold producer and de-risk itself from being a single asset producer.
Announcing the finalisation of the deal, chief executive officer Mr Mark Learmonth, in a statement, described the deal as a cornerstone for its strategy multi-asset gold producer.

Bilboes Gold Limited

“Caledonia Mining Corporation Plc is pleased to announce that, following the satisfaction of conditions precedent, it has today (Friday) completed the acquisition of Bilboes Gold Limited, the parent company which owns, through its Zimbabwe subsidiary, Bilboes Holdings Private Limited, the Bilboes gold project in Zimbabwe,” he said.
“Completion of the Transaction is the cornerstone in Caledonia’s strategy to create a mid-tier, multi-asset gold producer focussed on Zimbabwe.”

Outlining operational strategies going forward, Mr Learmonth said Bilboes is a large, high-grade sulphide deposit, which is amenable to low-cost, open-pit operations.
He said a feasibility study on the Bilboes project, which has been prepared by the Bilboes vendors envisages the production of approximately 168 000 ounces of gold per annum over a 10-year life.

“Now that the transaction has been 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,” said Mr Learmonth.
“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.”
He 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.

Mr Mark Learmonth

“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.”

In November, President Mnangagwa commissioned a US$67 million Central Shaft project, one of the flagship gold investments and deepest shafts in Zimbabwe, with a depth of 1 200 metres from the surface.
Being one of the flagship projects under the country’s drive to achieve a US$12 billion mining milestone target by 2023, the objective of the Central Shaft is to provide access to the deeper mineral resources and enable the company to increase production and extend the mine life.

Caledonia has also constructed a 12,2MW solar plant at Blanket, at a cost of approximately US$14 million. The project is in line with the Government’s strategy to boost power production.
The mining sector contributes about 70 percent of the country’s forex earnings largely driven by gold, platinum and diamond.-chronicle.co.zw