Caledonia Mining Corporation (CALq.L) said on Wednesday that it plans to spend $132 million this year to kick off development of what is expected to become Zimbabwe’s largest gold mine once it is operational.
The planned spending forms part of a wider $162.5 million capital expenditure programme for 2026 and remains subject to board approval and the availability of funding, Reuters reported.
The announcement comes as miners take advantage of record-high gold prices to expand production.
Spot gold prices hit another record high of $4,639.48 an ounce early on Wednesday, driven by escalating tensions in Iran, concerns about the Federal Reserve’s independence, and softer inflation data that has increased expectations of interest rate cuts.
Caledonia currently operates the Blanket mine in Zimbabwe, which produces about 80,000 ounces of gold per year. The company plans to develop the Bilboes mine at a projected total capital cost of $584 million.
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According to Caledonia, production at Bilboes is expected to begin in late 2028. Once the mine reaches steady-state operations, it is forecast to produce around 200,000 ounces of gold annually from 2029 for an initial period of 10 years.
The company has said it intends to finance the Bilboes project through a combination of non-recourse senior debt, contributions from its existing operations, and specialised funding options such as streaming arrangements, where investors provide upfront cash in exchange for future metal supply.
Caledonia’s expansion plans were further supported last month when Zimbabwe’s government reversed earlier proposals to double the gold royalty rate and change the tax treatment of capital expenditure.
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Image Credit: Mining.com
