Gold miner Caledonia Mining Corporation has completed the acquisition of Bilboes Gold, which owns the Bilboes gold project in Zimbabwe through its Zimbabwe subsidiary Bilboes Holdings. 

The total consideration payable is for the acquisition is about 5.1-million shares, representing about 28.5% of Caledonia’s fully diluted share capital and a 1% net smelter royalty (NSR) on the project’s revenues.   

Based on the last trading day’s closing share price on NYSE of $12.82 a share, the value of the maximum number of new shares that could be issued as consideration if there is no adjustment is currently about $65.6-million, Caledonia said on January 6. 

Completion of the transaction is the cornerstone in Caledonia’s strategy to create a midtier, multi-asset gold producer focussed on Zimbabwe. 

Bilboes is a large, high-grade sulphide deposit which is amenable to low-cost, openpit operations, Caledonia CEO Mark Learmonth explained.  

A feasibility study on the Bilboes project, which has been prepared by the Bilboes vendors, envisages production of about 168 000 oz/y of gold over a ten-year life.   

Learmonth said that, with the transaction now completed, Caledonia will commission its own feasibility study to identify the most appropriate way to commercialise the asset. 

“I anticipate the feasibility study will take 12 to 14 months to complete. 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.  

Learmonth said the acquisition of Bilboes should be seen in the context of the successful implementation of the Central Shaft project at Caledonia’s Blanket mine in Zimbabwe, which is now producing at its targeted production rate of 80 000 oz/y, along with the acquisition of exploration projects at Maligeen and Motapa.  

“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,” he noted. 

The Bilboes project has National Instrument 43-101-compliant proven and probable mineral reserves of 1.96-million ounces of gold in 26.64-million tonnes at a grade of 2.29 g/t, along with measured and indicated mineral resources of 2.56-million ounces of gold in 35.18-million tonnes at a grade of 2.26 g/t, with inferred mineral resources of 577 000 oz of gold in 9.48-million tonnes at a grade of 1.89 g/t. 

The project has produced about 288 000 oz of gold since 1989.