African development banks are considered the most probable sources of funding for Caledonia's proposed $250-million gold mine in Zimbabwe, according to media reports citing a senior company executive.
Caledonia, the company that owns the Blanket gold mine in Zimbabwe, is currently working on updating a feasibility study for the construction of a new mine at Bilboes.
This new mine has the potential to become the largest gold mine in the country, with a projected annual production of at least 170,000 ounces.
Caledonia, supported by investors such as BlackRock and Cape Town-based fund manager Allan Grey, is among the rare foreign investors, alongside Anglo American Platinum and Impala Platinum, who have chosen to navigate Zimbabwe's challenging economy, characterised by foreign currency shortages and bouts of hyperinflation.
Reuters quoted company chief executive Mark Learmonth as saying during a conference call that they are currently engaged in initial discussions with the lenders who are considered to be the most likely partners.
"They are going to be African development banks that have indicated a high degree of interest in this project," he said.
Learmonth said that the majority of the funding for the Bilboes project would come from debt.
"We will not be approaching the market for any non-debt funding until we've got a better idea of what the debt capacity is because, frankly, nothing is going to be as cheap as debt funding," he said.
Caledonia's operating profit dropped by 62% in 2023 to $15.18 million from $40.28 million the previous year.
The decline was attributed primarily to the rise in administrative and production costs.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
