Caledonia Mining Corp. (NYSEAM:CMCL) is exploring options to raise $250 million needed to develop its Bilboes project into what could be Zimbabwe's biggest gold mine. The company, which also owns the Blanket gold mine in Zimbabwe, could raise the money via a combination of debt, its own cash reserves and equity, Maurice Mason, Caledonia's vice president, corporate development, told Reuters.

The Bilboes project could potentially produce about 170,000 ounces of gold annually, boosting Caledonia's total bullion output to around 250,000 ounces, Mason said. Caledonia, backed by investors including Cape Town-based fund manager Allan Gray, is one of a number of mining investors that are searching for new opportunities in Zimbabwe even as the economy buckles from ongoing challenges such as intermittent power cuts, scarcity of U.S. dollars and hyperinflation. Caledonia, which plans to construct the Bilboes mine over two years, is doing studies to find solutions to reduce the up-front capital, Mason said.

"It will be Zimbabwe biggest gold mine by far," Mason told Reuters via email. "We are considering phased capital raising, but that will depend on the outcome of the review of the feasibility study".