Bilboes Preliminary Economic Assessment

Caledonia to file preliminary economic assessment on chosen approach to develop the Bilboes sulphide gold project

(NYSE AMERICAN: CMCL; AIM: CMCL; VFEX: CMCL)

St Helier, June 3, 2024 - Caledonia Mining Corporation Plc ("Caledonia" or the "Company") is pleased to announce that the Company will shortly be filing a preliminary economic assessment in accordance with Canada's National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") on SEDAR+ (the "PEA") for a single-phase development of the Bilboes sulphide gold project (the "Project"). A copy of the PEA, which is entitled "Bilboes Gold Project Preliminary Economic Assessment" with effective date May 30, 2024 prepared by DRA Projects (Pty) Ltd ("DRA"), and reflecting the summary information contained in this announcement, will also be available on the Company's website at www.caledoniamining.com/investors/technical-reports/. All dollar figures are in U.S. dollars unless otherwise noted.

The PEA reflects the work that has been done by Caledonia and its consultants over the period since the Project was acquired by Caledonia in January 2023. This work focussed on updating the feasibility study in respect of the Project that was prepared by DRA on behalf of the previous owners of the project and which had an effective date of December 15, 2021 (the "Former Feasibility Study"); the work also considered alternative development options for the Project, which included multi-phase development and changes to certain aspects of the Project. The main change to the Project development plan that has been made relates to the proposed construction of the Tailings Storage Facility ("TSF"), which will now be constructed on a modular basis to reduce the initial capital expenditure and therefore improve the economic returns. The revised approach to the TSF constitutes a "significant change" to the Project and requires the preparation of an entirely new technical and economic study. The work that has been carried out to date in respect of the revised approach to the TSF is to the level of a preliminary economic assessment and not to the level of a feasibility study. Due to the significance of the TSF to the overall Project, the entire body of work that has been completed to date is therefore at the level of confidence of a preliminary economic assessment. Over the course of the next 9 months, the Company intends to upgrade the confidence level of the study in respect of the TSF so that the entire body of work on the Project may be classified as a feasibility study which will be published in due course.

The PEA therefore supersedes the Former Feasibility Study.

Highlights of the PEA

The publication of the PEA will follow the Company's decision to advance the Project to the execution stage in a single-phase development instead of multiple phases. This decision followed an evaluation of different development options, revealing that the single-phase approach is expected to yield superior returns.

Summary of the revisions made to the single-phase development plan

The Company incorporated several material revisions to the original single-phase development plan (as set out in the Former Feasibility Study) which include:

The results of the evaluation confirmed that the single-phase development option, that incorporates rephased capital spending, revised costs and applies updated gold prices is expected to offer more appealing returns than multi-phased development options. This approach is also anticipated to generate cash returns capable of accommodating a lower cost of capital due to an increased debt capacity compared to the multi-phase development options. The Company expects that the single-phase development option will optimise capital allocation and maximise the NPV of the Project compared to the multi-phase development options.

Further work is required on the selected single-phase development option to elevate the confidence level of the PEA towards the New Feasibility Study. DRA has indicated that this work is expected to be completed in the first half of 2025. The main focus of this work relates to the TSF, which is effectively a new undertaking due to the modular construction approach.

The Company believes that a significant proportion of the funding requirement for the single-phase development option may be provided by one or more lenders. The Company will work with its appointed debt adviser to secure an acceptable debt funding package in parallel with the process of preparing the New Feasibility Study.

Summary of economic outcomes in the PEA*:

*Outcomes calculated at a gold price of $1,884/oz

Summary of mineral resource estimate in the PEA*:

Base Case Mineral Resources (0.9 g/t Au) Reference Point: in Situ (31 December 2023)

*based on a 0.9g/t Au Cut-Off Grade

• CIM definitions (May 10, 2014) observed for classification of mineral resources.
• Mineral resources are in situ.
• Block bulk density interpolated from specific gravity measurements taken from core samples.
• Resources are constrained by a Lerchs-Grossman (LG) optimized pit shell using Whittle software.
• Mineral resources are not mineral reserves and have no demonstrated economic viability. The estimate of mineral resources may be materially affected by mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social, and governmental factors (Modifying Factors).
• The results of the PEA are preliminary in nature and include inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. For the risks in realizing the PEA, please refer to those set out below at "Cautionary Note Concerning Forward-Looking Information".
• Numbers may not add due to rounding.
• The mineral resource estimate has been depleted to reflect mining up to 31 December 2023.
• Effective Date of mineral resource estimate is 31 December 2023.

Inferred mineral resources have not been included in any economic outcomes in the PEA.

No mineral reserves were declared in the PEA.

Sensitivity analysis in the PEA (NPV (post tax; $'m)):

Mark Learmonth, Caledonia's Chief Executive Officer, commented:

"The Board's decision to proceed with the single-phase development option for Bilboes represents a key strategic milestone in our journey to becoming a multi-asset, mid-tier gold producer. Notwithstanding the general inflationary increase in operating costs and capital costs over recent years, the PEA re-confirms that Bilboes is a high-quality mid-scale asset that can generate attractive economic returns. The PEA also confirms that Bilboes has an attractive production profile with the potential to almost triple Caledonia's production capacity to over 200,000 ounces per annum in combination with production from Blanket Mine.

"The peak funding requirement for the Project is expected to be approximately $309 million, with a sizable proportion funded through debt. The Company and, in the past, Bilboes' previous owners, have had highly positive engagements with prospective debt providers and we now propose to re-engage with these providers in parallel with the process of preparing the New Feasibility Study.

"To date, 2024 production at Blanket has been robust and the Company remains well positioned to deliver returns to shareholders while expanding our asset portfolio and growing our production profile. I am very excited by the opportunity we have to evolve our business, which we believe will generate significant long term shareholder value.

Background

Caledonia acquired the Project in January 2023 for 5.12 million consideration shares (28.5% of Caledonia's fully diluted equity, valued at approximately $65.7 million at the time) and a 1% net smelter royalty.

The main objective was to construct a large, open-pit operation to extract sulphide mineralisation. The Former Feasibility Study in respect of the Project was prepared by the previous owners which targeted mine and processing operations to produce an average of 168,000 ounces of gold per annum over a 10-year life of mine.

Caledonia commissioned an update of the Former Feasibility Study for the sulphide project reflecting the prevailing economic environment for capital and operating costs and a revised gold price outlook. It aimed to identify the most judicious way to commercialise the Project to maximise future shareholder value; this explored the Project potentially being implemented in a single step or on a phased basis over an extended life of mine and is resulting in the publication of the PEA which is expected to be converted into the New Feasibility Study in due course.

Investor webinar

Investors are invited to a Zoom webinar for management to discuss the PEA and the proposed development of Bilboes. The details are as follows:

When: June 6, 2024 02:00 PM London

Topic: Bilboes PEA Investor Call

Register in advance for this webinar:

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