Caledonia Mining Corporation Plc Mining Forum Americas 2026

Focused gold mining and development company. We're focused on growth. We have a target to increase production from the current level of about 75,000 ounces to over 200,000 ounces from 2029 onwards. As you'll see in a moment, we have a very attractive portfolio of development projects, and we've delivered very strong financial returns to shareholders, as you'll see. We've got four assets at the moment. The first one is a producing mine called Blanket, of which we own 64%. We've owned that since 2006 when we bought it off Kinross for $4 million. Only $4 million. Since then, we've increased our resource base from 60,000 ounces to nearly 3 million ounces, 2.2 measured and inferred, and 750,000 of measured and indicated, and 750,000 of inferred. We've shown very clearly our ability to grow assets and invest heavily in a jurisdiction like Zimbabwe.

The real interest for investors is the Bilboes asset, which is our immediate development asset. It's 100% owned. We acquired it in 2023 for about $65 million plus a 1% NSR. It's got about 2.5 million of ounces of M&I at a grade of 2.3 grams a ton. We've published a feasibility study on that project in November last year, which I'll unpack those economics for you shortly. We're now embarked on building that project and turning it to account. That's the immediate focus of value uplift. We also have an early-stage exploration project called Motapa, which is immediately adjacent to Bilboes. The fourth asset, which has been somewhat overtaken by events, is an asset called Maligreen. We've been in Zimbabwe for a long time now. We've been there since 2006, and it's been a long road for us.

Over that time, we transformed the business from being a single asset miner focused on Blanket Mine into a portfolio of development and growth assets. From 2025 onwards, we're now going to transition into being a multi-asset, mid-tier producer, targeting production of over 200,000 ounces a year. At the heart of all of this is value creation, both for shareholders and for stakeholders in Zimbabwe. Let's start with stakeholders in Zimbabwe. Over the last 10 years, we've distributed over a quarter of a billion dollars in Zimbabwe to Zimbabwean stakeholders. That is the Government through royalties and taxes, and also to our local shareholders. We've got 10% of the Blanket Mine is owned by workers, 10% is owned by the community, and 16% is owned by the Government.

We're very proud of that contribution because it gives us a very firm social license to operate in Zimbabwe and creates a very good foundation for our further growth there. We're investors, and we had to make money for investors. What you see here is a chart going back for the last 10 years which shows Caledonia share price plus reinvested dividends. We're a quarterly dividend payer. We've been paying a quarterly dividend since 2012. That shows a return of about 1,200% over 10 years. That substantially exceeds the return on the GDX and the GDXJ and also the return on underlying gold. We've got a strong track record of delivering value for shareholders as well as creating value for domestic stakeholders. Let's have a few minutes on the cornerstone asset, which is the Blanket Mine, which we acquired in 2006 from Kinross.

Currently, it's producing at a rate of about 70,000-75,000 ounces a year. It's got 2.2 million of M&I, and that's a recent resource upgrade. At the moment, we're now busy converting that increased resource base into a new life of mine, which I expect we'll publish towards the end of this month and should give rise to a significant increase in our annual run rate to production. It's located in the south of Zimbabwe, about an hour and a half's drive south of Bulawayo, which is Zimbabwe's second city. One-hour flight from Johannesburg, and from Johannesburg, you've got international flights to pretty much anywhere in the world. It's got a strong mining background, so there's a very good supply of mining experienced people at every level you could look for, and also a strong supply industry.

If you need technical skills, they can be brought in very easily from South Africa. As I said, we own 64%, and the balance is spread between employees, the local community, and government. We've had good drilling results from Blanket. I think what this slide doesn't really show is a couple of initiatives that we've taken very recently to increase production. The first of those is in June. We introduced a 7-day working week at Blanket instead of 6 days. That's primarily to address worker fatigue, but that is going to, and has already increased our run-of-mine production by about, it'll be about 100,000 tons a year and at a grade of just over 3 grams a ton. That will in due course convert into about 8,000 or 9,000 additional ounces of gold production.

The second thing that we've recently announced is the discovery of an open pitable oxide resource on the mine property. We'll start commercializing that before the end of the year, and that should again add an extra 4,000 or 5,000 ounces of production a year. So we can see a very clear trajectory to increase production from the current level of approximately 75,000 ounces up to something close to 90,000 ounces, which should go a long way towards addressing the continued cost creep as we continue to face inflationary pressure. So that's Blanket, which is a cornerstone asset. It generates cash, it pays the head office overheads, it pays the dividend, and it makes a modest contribution towards the next asset, which is the Bilboes gold project.

Bilboes is located a little bit north of Bulawayo, so it's in the same area as Blanket, but not close enough to have any direct synergies. It's fully owned. It's a fully owned, large-scale, open, pittable gold project. As I said, it's got 2.5 million ounces at a grade of 2.3 grams a tonne. We've already started this month. We've got boots on the ground now to start the development of the project, and we're looking at first gold production in 2 years' time, in the fourth quarter of 2029, at about 200,000 ounces a year. It's got very strong project economics, and at a prevailing gold price of about $4,000 an ounce, it's got an NPV of just over $1.5 billion, which is more than 3 times Caledonia's current market capitalization.

An ungeared post-tax investment internal rate of return of nearly 60% and a life of mine of nearly 11 years. It is a standout asset. Here you see the production profile. As I say, first production starting towards the back end of 2028, 2029 being the first full year of production. Production then oscillates. We deliberately front-ended or front-loaded production to enhance the project economics. As you will see towards the end of this presentation, we do have an asset immediately adjacent to Bilboes, and in the fullness of time, we do expect material from that adjacent asset, called Motapa, to smooth out this production profile. That is something that we will work on over the course of the next few years. As it stands at the moment, this project as presented has exceptional economics.

This is simply an extract from the feasibility study that we publish at about this time next year. The only thing that we have done is we have added on the right-hand side a running of the feasibility study at approximately the current gold price of about $4,100. You can see at the bottom, the very bottom row, the all-in sustaining cost is very competitive. At this current gold price, including the Government royalty, the all-in sustaining cost is about $1,145 an ounce. At a gold price of, say, $4,000 an ounce, you can see we are clearing about $3,000 an ounce of profit. In that first full year of production, given the tax regime in Zimbabwe, that will be tax-free. That is about $600 million in the first year of disposable cash.

The peak funding requirement is about $484 million, and I will explain to you in a moment how we propose to fund that, but it has got a payback of less than one year. Let us just focus on the funding strategy, and there are really four components to that strategy. The first that we implemented late last year at the turn of this year was to put in a gold price hedging against our cash flows coming out of Blanket. We hedged a floor price of $3,500 an ounce, and we did that by purchasing out-of-the-money put options. It was an initial upfront cost of about $13 million, but it gives us full price participation to the upside. The importance of this gold price hedging actually becomes more relevant as we talk through this, but that is the first thing we did.

The second thing we did in January this year is we had a very successful offering of convertible notes in the U.S. We initially went out to raise $100 million, but there was very strong demand, and we increased that to $150 million. That offering was over four times subscribed. That really shows a very substantial change in market perceptions towards Caledonia, this asset, and also Zimbabwe as well. We are very pleased to get that away. Embedded in that transaction was a $20 million capped call product, which increased the conversion premium from the standard 25% to a 50% premium to the prevailing share price when we did it. It was quite a clever corporate finance move. The third aspect of funding is an interim funding facility.

We are raising about $150 million from Zimbabwe banks, and this is where the hedging comes into place, because left to their own devices, the Zimbabwean banks would probably be using a reference gold price of $2,000. Because of the hedge, we now don't need to debate the gold price, and the gold price that they are using to put together their funding package is $3,500 an ounce. We are very close to finalizing that. We had hoped to close this by the end of September. We are in the final stages of documentation. Really, what we are coming down to now is how to capture, in legal terms, the value of the hedge that arises at the head office level in Jersey, how to make that value, if it is needed, flow down into Zimbabwe.

I would expect that facility to close certainly by the end of October, maybe within a couple of weeks. So that is the interim facility, $150 million. Zimbabwean banks don't really have the capacity to offer a long-term funding solution. In the background, we are also working on a traditional project financing, which we expect to complete sometime in the next six to nine months. That will be about $300, $350 million, and part of that will be used to repay the interim facility. As far as we stand today, we are highly confident that this package will be funded and the project will go forwards. Here, this gives a bit of background as to the sources of how we are going to spend the money and where it is going to come from.