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Caledonia Mining to buy one of Zimbabwe’s largest gold projects

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Caledonia Mining to buy one of Zimbabwe’s largest gold projects

Published by Cecilia Jamasmie in www.mining.com

Caledonia Mining Corporation is set to be the new owner of one of Zimbabwe’s biggest gold mining projects after agreeing to acquire Bilboes Gold Limited, owner of the namesake gold project, in a $53 million shares deal, plus a royalty on revenues.

 

The transaction could more than double Caledonia’s annual production, potentially making it Zimbabwe’s top gold miner. It would also help the company become a multi-asset mid-tier producer.

 

According to the latest feasibility study, the asset has the potential for an open-pit gold mine producing an average of 168,000 ounces per year over a 10-year life of mine.

 

Caledonia said it plans to conduct its own feasibility study to determine the “most judicious way”to commercialize the deposit. 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, the company said.

 

The transaction is subject to the current owners of Bilboes receiving confirmation from Zimbabwean authorities that the mine will be able to export gold directly and retain the sale proceeds in US dollars rather than domestic currency.

 

Caledonia currently owns 64% of the Blanket gold mine, in the southwest of Zimbabwe, which is expected to produce 80,000 ounces this year thanks to a new shaft.