Back to a bigger Bilboes
Nic Dinham
The Bilboes feasibility study: The latest feasibility study (FS) on the Bilboes project was published in November 2025. The project is potentially transformational for CMC.
Back to a big bang Bilboes: The FS has maximised the NPV and project size to treat up to 3mtpa of refractory ores through a BiOX plant to produce 1.55moz over a 10-yr life-of-mine (LOM). This could double or treble CMC’s attributable production in 4 years with the potential for an even larger earnings uplift.
Capex: Capex for the project has materially increased over the last 4 years. The November FS estimates that Bilboes will cost $627m, with a Phase 1 cost of $484m. Bilboes was valued at $498m at an 8% real discount rate, with an IRR of 32%.
Our Bilboes valuation: The FS is required to anchor its $2,850/oz gold price to a 3-year trailing average which has little relevance to today’s price of above $4,400/oz. Using a $4,300/oz price and a country-appropriate real discount rate of 20%, the project generates an NPV of $519m and an exceptional IRR of 57%.
Funding quantum: Phase 1 of Bilboes will cost $484m in August 2025 money terms. This is an ‘instant’ investment cost. In the 4 years it may take to get the plant to full production, capex could escalate by 12% p.a. Total escalated funding requirements may be as high as $800m of which 80% may be funded by various forms of debt.
Blanket support: Increasing operational stability should ensure that Blanket Mine generates between $70m/a and $90m/a of dividends at current metal prices. Of this, c. $30m/a could be added to CMC’s balance sheet, which along with its existing cash and investments, could minimise an external equity capital raise to $40m.
Making Bilboes a reality: CMC’s ability to arrange funding is now the key to making the project a reality. This will not be a trivial task given the size of the funding required and the moving regulatory targets. However, if successful, Bilboes could become the first Zimbabwean mining project to be supported by large-scale, third-party debt funding in nearly two decades.
CMC valuation: We value CMC using a DCF over two possible LOM scenarios at Blanket Mine assuming a $4,500/oz gold price and discounting by a Zimbabwe-appropriate 20% real discount rate. The midpoint of our valuation is $30.6/s. At $4,900/oz, CMC’s valuation would increase to $33.5/s. The rapid rise in the gold price from $3,300/oz used in our July report, has generated a significant increase in the value of the company from $21.8/s. The risk to these valuations is the gold price and possible execution delays at Bilboes. Our FVVR is $29.05-$32.2 (prev $19.56-$25.25).
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