Online Reporter
Sikhulekelani Moyo Zimpapers Business Hub
LISTED gold producer Caledonia Mining Corporation has raised gross proceeds of US$150 million from a Convertible Notes Offering, providing the company with a strong and flexible source of long-term capital while reflecting investor confidence in the business.
Caledonia recently announced the pricing of a US$125 million aggregate principal amount of 5.875 percent Convertible Senior Notes due 2033 in a private placement to persons reasonably believed to be qualified institutional buyers, pursuant to Rule 144A under the United States Securities Act of 1933, as amended.
A senior convertible note is a priority debt security that offers investors the option to convert their investment into equity shares of the issuing company. Both start-up and established companies use such instruments to raise capital as they provide flexibility while ensuring investor recourse.
In a statement, the gold producer said its US$150 million, seven-year convertible senior notes offering received exceptionally strong support from institutional investors in the United States.
Investor demand reportedly exceeded US$600 million after three days of marketing, prompting an increase in the offering size from US$100 million to US$125 million. This was followed by the exercise of an option by the initial purchasers to buy an additional US$25 million of notes, bringing the total proceeds to US$150 million.
“We are extremely pleased with the outstanding response to the Convertible Note Offering from high-quality institutional investors in the United States, which is a tremendous endorsement of Caledonia and the progress we have made as a business,” said Caledonia chief executive officer Mr Mark Learmonth.
“This successful offering gives us a strong, flexible source of long-term capital and reflects the confidence investors have in our management team, our track record of delivery and the growth potential of the company.
“We are delighted with the outcome and look forward to building on this momentum as we continue to advance Caledonia’s long-term objectives,” he said.
According to Caledonia, the notes carry a cash interest coupon of 5.875 percent per annum, payable semi-annually in arrears on January 15 and July 15 of each year, beginning July 15, 2026.
The conversion price is approximately US$40.51 per common share of Caledonia, representing a premium of about 25 percent to the last reported sale price of the company’s common shares on the NYSE American on January 14, 2026, subject to customary anti-dilution adjustments.
The company said potential economic dilution upon conversion of the notes was mitigated through the purchase of cash-settled capped call options with a cap price of approximately US$56.72, representing a premium of about 75 percent over the last reported sale price of the common shares on the same date.
“The purchase price for the capped call options was approximately US$14.4 million. Conversions of the notes may be settled in common shares, cash, or a combination of common shares and cash, at Caledonia’s election,” the company said.
“Additionally, Caledonia will have the right to redeem the notes in certain circumstances and will be required to offer to repurchase the notes upon the occurrence of certain events. The notes will mature on January 15, 2033, unless earlier converted, redeemed or repurchased.”
