Caledonia Mining Corporation Plc priced a $125 million private placement of 5.875 % convertible senior notes due 2033, an upsizing from an initial $100 million. The notes are unsecured, pay semi‑annual interest in arrears on January 15 and July 15, and can be converted into common shares at the holder’s option.
The offering is expected to close on January 20, 2026. Net proceeds are projected at $120.2 million, rising to $144.4 million if the optional $25 million is exercised. The company will use the funds to advance the Bilboes gold project, fund capped call transactions that limit dilution, support general corporate needs, cover ongoing operating costs, and strengthen working capital.
Bilboes is the centerpiece of Caledonia’s growth strategy. The company plans to invest $132 million in 2026 toward a total capital cost of $584 million, with production slated to begin in late 2028 and reach 200,000 ounces per year by 2029. The financing provides the liquidity needed to accelerate this development while preserving the company’s shareholder‑friendly dividend policy.
The market reacted negatively to the announcement, largely because the convertible notes introduce potential future dilution and the company’s lower production guidance for the Blanket Mine in 2026 (72,000–76,500 ounces versus 76,213 ounces in 2025) signals near‑term operational headwinds. Investors also weighed the impact of higher expected costs and the departure of COO James Mufara, which added uncertainty to the management team.
Despite the short‑term concerns, the financing strengthens Caledonia’s balance sheet and positions the company to capture upside from the Bilboes project. The convertible structure allows the company to defer immediate debt service while providing investors with a conversion premium of roughly 25 % to the closing price on January 14, 2026, reflecting confidence in future share price appreciation.
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