Caledonia Mining Reports Record FY 2025 Results with Profits Soaring 193% and Declares Dividend

• Early 2026 bolster: US$150 million convertible senior notes completed, with approximately US$130 million net proceeds.
• Hedging in place: minimum price of US$3,500/oz on 3,000 oz per month from January 2026 to December 2028, underpinning cash flows through the Bilboes build. This is a floor, not a cap.
• Interim funding facility up to US$150 million being progressed, with co-lead arrangers appointed.

Opinion: the funding stack looks thoughtfully assembled for a major build. Convertible notes can introduce future dilution, but terms are not disclosed here. The gold price floor improves lender confidence without sacrificing upside exposure.

Operations at Blanket – stable output, investment to improve reliability

Blanket’s 76,213 oz met increased guidance despite late-year power interruptions and crew moves that affected grades. The company expects 2026 production of 72,000 to 76,500 oz, with a stronger second half as higher-grade areas come through.

Capex at Blanket was US$30.8 million in 2025, including completion of the new tailings storage facility. The Board has approved two reliability projects that matter for future costs and uptime:

• 34 km 132 kV power line to the national backbone – US$14.2 million. Target completion Q2 2027. Expected to reduce grid power cost, cut diesel use and add roughly 1,000 oz per year from improved operating reliability.
• Central Shaft winder conversion from AC to DC – US$2.2 million over Dec 2026/Jan 2027, expected to save about US$0.6 million per year.

Safety remains front and centre after a fatality in September 2025. No lost time injuries occurred in Q4. LTIFR for FY 2025 was 0.84 per million work hours. The IsoMetrix safety system is now live across operations.

2026 capital plan – big step-change spend driven by Bilboes

Total Group capex projected at US$178.9 million in 2026:

• Sustaining capex: US$43.0 million, largely at Blanket.
• Growth capex: US$135.9 million, including US$132.1 million allocated to Bilboes development (subject to Board approval and funding) and US$3.8 million for exploration at Motapa.

Opinion: it is an aggressive but coherent plan. Expect near-term cash outflows to rise materially as Bilboes ramps up, which is why the bolstered balance sheet and hedging matter.

Bilboes feasibility – the catalyst for multi-mine status

Caledonia has approved Bilboes for development following the November 2025 feasibility study. Headline figures:

• Proven and probable reserves: 1.75 million oz contained in 24.1 million tonnes at 2.26 g/t.
• Life of mine: 10.8 years, single-phase development.
• Production: about 200,000 oz in the first full year, with first production anticipated in late 2028.
• Economics: post-tax NPV (8% real) of US$582 million and post-tax IRR of 32.5% at US$2,548/oz, with stronger returns at prevailing spot prices.

Why it matters: if delivered on time and budget, Bilboes could materially re-rate the Group’s production and earnings profile. Financing discipline and execution are now the key watch points.

Motapa exploration – building optionality next to Bilboes

Motapa sits adjacent to Bilboes and is shaping up as a strategic resource hub. 2025 work included 1,564 m of diamond drilling and 18,325 m of reverse circulation drilling. A maiden mineral resource estimate for sulphides at the Motapa North trend is expected in Q2 2026. The 2026 plan allocates US$3.8 million to exploration, with programmes aligned to Bilboes development timing.

Dividend details and dates

The Board approved a quarterly dividend of 14 cents per share, payable on 17 April 2026. Ex-dividend dates are 31 March 2026 (VFEX) and 2 April 2026 (AIM and NYSE American), with a record date of 2 April 2026. UK-registered shareholders will be paid in Sterling.

Risks and things to watch

• Costs: AISC at US$1,952/oz was a touch above guidance and may face further inflation. The new power line and winder upgrade should help from 2027, but accommodation costs at Blanket are rising.
• Grade and output: 2026 Blanket guidance is slightly lower at the midpoint, with H2 weighted delivery.
• Project execution and funding: Bilboes requires significant capital. The hedging programme and convertible notes strengthen the case, but funding terms and timelines remain critical.
• Safety: ongoing emphasis is appropriate after the 2025 fatality, with systems upgrades now in place.

Josh’s take – a strong platform with clear growth momentum

This is a high-quality print. Caledonia converted a buoyant gold price into record revenue, profits and free cash, moved into net cash and kept investing for resilience. 2026 will likely see lower Blanket output and much higher capex, but the financial buffer, price floor and funding plan look sensible. If Bilboes progresses as outlined, Caledonia transitions from a solid single-asset producer into a multi-mine business with scale by the end of the decade.

For retail investors, the set-up is straightforward: strong current margins, a maintained dividend, and a big, financed growth option in Bilboes. The upside case is compelling, but execution and cost control remain the swing factors to monitor through 2026.