Gold miner Caledonia Mining Corporation is set to raise $13 million in funds to bolster its balance sheet and provide working capital flexibility for its new gold projects in Zimbabwe. The company plans to raise $10 million via an accelerated bookbuilding process in South Africa and the UK, while $3 million will be raised through the issuance of Zimbabwe depositary receipts by IH Securities. The funds will be used to finance the development of the Bilboes, Motapa, and Maligreen projects.
The Bilboes project, which Caledonia acquired for $65.7 million in January, has already produced about 288,000 ounces of gold since 1989. The project has National Instrument (NI) 43-101-compliant proven and probable mineral reserves of 1.96 million ounces of gold. Caledonia plans to use $2 million of the funds raised to conduct a feasibility study for Bilboes and a further $2 million for the procurement of a management facility at Bulawayo.
Caledonia acquired the Motapa gold exploration project in Southern Zimbabwe for $8.25 million in November 2022. The mining lease for Motapa covers about 2,200 hectares, and the company believes that its proximity to Bilboes will allow for synergies in the evaluation of the geological potential for Motapa. Caledonia plans to use about $6 million of the funds raised for further exploration at Motapa.
Lastly, Caledonia acquired the Maligreen project for $4 million in November 2021. The property contains NI 43-101-compliant measured and indicated mineral resources of 442,000 ounces of gold. Caledonia plans to use about $2 million of the funds raised for drilling and exploration at Maligreen.
Caledonia’s CEO, Mark Learmonth, commented on the company’s 2022 results and 2023 outlook. The company posted earnings before interest, taxes, depreciation, and amortization of $50.4 million for the financial year ended December 31, 2022, compared to $46.4 million in the prior year. Gross revenue increased to $142 million for the 2022 financial year, compared to $121 million in the prior year. The Blanket mine produced 80,775 ounces of gold in the year under review, and Caledonia paid a dividend of $0.56 a share for 2022.
Looking ahead, Caledonia expects the Blanket mine to produce 75,000 to 80,000 ounces of gold in 2023, with the Bilboes oxide operation delivering a further 12,500 to 17,000 ounces of gold this year. The installation of a 12.2 MW solar plant at Blanket is expected to reduce Caledonia’s consolidated cost per ounce of gold produced by about $37.