Bilboes sulphide project to triple Caledonia production
CALEDONIA Mining Corporation Plc has announced that its Bilboes Sulphide Gold Project has undergone a preliminary economic assessment, revealing that the project has a high-quality mid-scale asset profile, which can generate attractive economic returns. The assessment is a key strategic milestone for Caledonia in its journey to becoming a multi-asset and mid-tier gold producer.
The company signed a US$53,2 million agreement in 2022 to acquire Bilboes Gold Limited as part of its expansion drive.The peak funding for the project is estimated at US$309 million, with a sizeable proportion funded through debt, and Caledonia plans to file a new feasibility study with prospective debt providers.
The project has the potential to triple Caledonia’s production capacity to over 200 000 ounces per annum in combination with production from Blanket Mine, which it owns.In a statement on Monday, Caledonia said the main objective of the project was to construct a large, open-pit operation to extract sulphide mineralisation.
The preliminary economic assessment (PEA) reflects the work that has been done by Caledonia and its consultants over the period since the Bilboes Sulphide Gold Project was acquired by Caledonia in January 2023. The work focused on updating the feasibility study in respect of the project that was prepared by DRA on behalf of the previous owners of the project, which had an effective date of December 15, 2021.
It also considered alternative development options for the project, which included multi-phase development and changes to certain aspects of the project. The company said the last feasibility study in respect of the project was prepared by the previous owners, which targeted mine and processing operations to produce an average of 168 000 ounces of gold per annum over a 10-year life of mine.
Caledonia commissioned an update of the previous feasibility study for the sulphide project reflecting the prevailing economic environment for capital and operating costs and a revised gold price outlook.“The board’s decision to proceed with the single-phase development option for Bilboes represents a key strategic milestone in our journey to becoming a multi-asset, mid-tier gold producer,” said Caledonia chief executive officer, Mark Learmonth.
“Notwithstanding the general inflationary increase in operating costs and capital costs over recent years, the PEA re-confirms that Bilboes is a high-quality mid-scale asset that can generate attractive economic returns.“The company and, in the past, Bilboes’ previous owners, have had highly positive engagements with prospective debt providers and we now propose to re-engage with these providers in parallel with the process of preparing the new feasibility study.
“To date, 2024 production at Blanket has been robust and the company remains well positioned to deliver returns to shareholders while expanding our asset portfolio and growing our production profile.“I am very excited by the opportunity we have to evolve our business, which we believe will generate significant long term shareholder value,” he said. —chronicle
