Caledonia to capitalise on gold's good fortune in $132m project

UK gold bullion bars are stacked at Baird & Co in Hatton Garden in London, Britain. Image credit: Reuters/Hiba Kola/File Photo

Miners are riding a wave of record bullion prices to expand output. Spot gold prices hit another record high of $4,639.48 an ounce early on Wednesday, fuelled by escalating tensions in Iran, concern over the Federal Reserve's autonomy and softer inflation readings that boosted rate cut bets.

Caledonia said in a production update that the planned spending, part of a $162.5m total capital expenditure programme for 2026, was subject to board approval and availability of funding.

Caledonia, which already operates the 80,000-ounce-per-year Blanket mine in Zimbabwe, plans to develop the Bilboes mine at a projected total capital cost of $584m.

Gold expected to continue rising in 2026

24 Dec 2025

Production from the new mine is expected to begin in late 2028, with steady-state annual output of 200,000 ounces anticipated from 2029 for an initial period of 10 years.

Caledonia announced a private placement of $125m in convertible bonds to institutional investors. The debt, due to mature in January 2033, will mostly fund the Bilboes mine development, it said.

The company has said it plans to fund the Bilboes project through a mix of non-recourse senior debt, contributions from existing operations as well as specialised financing methods such as streaming, where investors provide cash in return for future metal supply.

Caledonia's expansion plans received a boost last month when Zimbabwe's government reversed plans to double the gold royalty rate and change the tax treatment for capital expenditure.