• Caledonia successfully closed an upsized US$150 million convertible senior notes offering with exceptional demand exceeding US$600 million from U.S. institutional investors
• This has delivered ~US$130 million in net proceeds to fund the Bilboes gold project
• The company has implemented a structured four-pillar funding strategy: gold price hedging, convertible notes, an interim US$150 million bank facility and future project finance

Harare- Caledonia Mining Corporation has successfully closed a US$150 million convertible senior notes offering according to its latest announcement. Originally targeted at US$100 million, the deal was upsized twice due to exceptionally strong demand from U.S. institutional investors, with orders exceeding US$600 million in just a few days of marketing.

This significant funding milestone is a critical step toward financing the development of the company’s large-scale Bilboes gold project in Zimbabwe.

Chief Executive Officer Mark Learmonth described the outcome as a powerful endorsement. He noted that the exceptional demand reflects strong confidence in the company’s strategy, the quality of its assets, and the proven operational track record at Blanket Mine.

“The successful Convertible Notes Offering with the upsizing of the offering to US$150 million due to exceptionally strong support marks a major milestone for Caledonia,” he said in a press release.

“Receiving more than US$600 million of demand from high quality North American investors is a tremendous endorsement of our strategy, the quality of our assets, our operational track record, and the longterm prospects of the Company.

“Since publishing the Bilboes Feasibility Study in November, we have acted quickly to begin to implement a robust and carefully sequenced funding plan.”

This structured approach is designed to control risk, limit dilution for existing shareholders, and position Bilboes as Zimbabwe’s next major, long-life gold production hub.

Convertible senior notes function as debt with an important additional feature: investors have the option to convert the notes into shares of the company at a later date rather than receiving repayment in cash. In this transaction, the notes carry a 7-year maturity, pay an annual interest rate of 5.875%, and become convertible starting October 15, 2032, or earlier under certain standard conditions.

To safeguard shareholders from excessive dilution in the event of conversion, Caledonia purchased capped call options. These options increase the effective conversion price from approximately US$40.51 per share to about US$56.72 per share. After accounting for fees and the cost of the capped call structure, the company secured net proceeds of approximately US$130 million.

This capital forms a central component of Caledonia’s carefully designed four-pillar funding strategy to advance the Bilboes project efficiently and prudently.

The company acquired Bilboes in 2022, and the feasibility study published in November 2025 outlines a major open-pit operation capable of producing an average of 168,000 ounces of gold annually over a 10-year mine life, delivering a total of about 1.55 million ounces at an all-in sustaining cost of roughly US$1,061 per ounce.

The project requires total capital of US$584 million, with peak funding needs around US$484 million, and first production is targeted for late 2028. If successful, Bilboes could become Zimbabwe’s largest gold mine and substantially increase the country’s overall gold output.

Reliable cash generation from Blanket Mine, Zimbabwe’s second-largest gold mine and Caledonia’s flagship operation, underpins the entire plan. In the financial year ended December 31, 2025, Blanket produced 76,213 ounces of gold.

For 2026, Caledonia has guided production at Blanket between 72,000 and 76,500 ounces, with stronger results anticipated in the second half of the year as higher-grade zones are mined, despite occasional operational challenges such as electricity supply interruptions.

4 Pillars of Funding

The four pillars of the funding strategy are as follows. First, a gold price hedging programme was implemented in December 2025, with Caledonia purchasing put options to secure a minimum price of US$3,500 per ounce for 3,000 ounces per month from January 2026 through December 2028. This measure protects Blanket Mine cash flows during the period of peak capital expenditure for Bilboes and enhances lender confidence.

Second, the recently completed convertible notes offering provides immediate capital of approximately US$130 million net while limiting dilution through the protective capped call structure.

Third, an interim funding facility of up to US$150 million is in advanced discussions with a consortium of Zimbabwean and South African commercial banks, with completion expected by mid-2026 and security provided by Blanket Mine cash flows.

Fourth, a formal project finance process will commence in the first quarter of 2026 with regional and global financial institutions, a step expected to take more than a year as lenders perform independent technical and resource assessments.

Combined, these four pillars, hedging protection, convertible notes proceeds, the anticipated interim facility, future project finance, and ongoing production from Blanket ensure sufficient liquidity to begin procuring long-lead equipment for Bilboes as early as the third quarter of 2026.

This keeps development aligned with the timeline outlined in the feasibility study. With gold prices currently well above US$4,800 per ounce, the market environment remains supportive.

Caledonia’s disciplined and timely financing moves position the company for meaningful growth in one of Africa’s most prospective gold regions and could help elevate Zimbabwe’s standing in global gold production.

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