The African Development Bank (AfDB) has expressed keen interest in financing Caledonia Mining Corporation’s proposed $250 million gold mine venture in Zimbabwe, as conveyed by the company’s CEO, Mark Learmonth.

Reuters reports that Caledonia, already holding ownership of a blanket gold mine in Zimbabwe, is conducting a feasibility study for the establishment of a new mine at Bilboes, aiming to yield approximately 170,000 ounces of gold annually, potentially making it the country’s largest gold mine.

During a conference call, Learmonth mentioned that the company is in initial discussions with the “most likely lenders,” primarily African development banks, which have shown significant interest in the project.

“The bulk of the funding for the project will be in the form of debt,” Learmonth clarified, emphasizing that they would delay seeking non-debt funding until they have a clearer understanding of the debt capacity. He added, “nothing is going to be as cost-effective as debt funding.”

Learmonth outlined that once funding is secured, a process that might take up to a year, the construction of the mine could be completed within two years.

Prior to the prospect of this new funding, Caledonia witnessed a 62% decline in its operating profit, dropping to $15.18 million in 2023 from $40.28 million the previous year, primarily attributed to increased administrative and production expenses.

Despite the challenging economic landscape characterized by foreign exchange shortages and hyperinflation, Caledonia, backed by global financial giant Blackrock and Cape Town-based fund manager Allan Gray, stands as one of the few foreign investors willing to navigate Zimbabwe’s market.