RESOURCES giant Tharisa Plc on Friday revealed plans to raise US$50 million by way of private placement to fund its US$391 million mining project in the country.
Tharisa controls Karo Mining House (KMH), a firm which is developing a Tier 1 platinum group metals (PGMs) mining operation in Zimbabwe.
The project area was acquired by Karo from Zimplats in March 2018.
The US$50 million bond, paying a semi-annual coupon of 9,5% per annum with a three-year tenure to 2025, would also be used as a way of introduction on the Victoria Falls Stock Exchange (VFEX), the firm said in a prelisting statement on Friday.
Admission to trading on the waterfall bourse is expected to be on or about December 14, this year, it said.
“This is a historic moment for Tharisa and our tier-one Karo Platinum Project on the Great Dyke in Zimbabwe. From our discussions to date with potential investors, both in Zimbabwe and abroad, we have received extremely positive feedback for this robust investment opportunity, boasting highly attractive returns,” said Phoevos Pouroulis, Tharisa’s chief executive officer.
“We expect strong participation from Zimbabwean investors in particular. This interest stems from Tharisa’s strong track record in developing projects on time and on budget, as well as the outstanding fundamentals of the Karo Platinum Project.
“Zimbabwe has indicated it is open for business and through our interactions with all levels of government, it is clear there is strong commitment to support Tharisa as we develop the Karo Platinum Project into a fully producing PGM mine. We look forward to welcoming investors on this exciting journey into a new operating jurisdiction.”
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Advisory firm Inter Horizon Securities said it believed that this “is an exciting opportunity to participate in a high quality USD fixed income product within the mining space listed on a public secondary market.”
KMH is 70% owned by Tharisa and 30% by Leto Settlement, the founding shareholder.
It is an intermediate investment holding company holding 100% of the issued ordinary share capital of Karo Zimbabwe, which in turn holds 85% of the issued ordinary share capital of Karo Platinum.
Generation Minerals holds a 15% free funded carry shareholding in Karo Platinum and has an option to acquire a further 11% exercisable after 24 months of signing the investment framework amendment, but before 36 months, and payable in cash.
Tharisa, as the parent company, said it has invested US$70 million in equity into KMH to date and has committed either itself or through group of companies a further US$135 million in equity and quasi equity either into KMH or directly into Karo Platinum.
This is in addition to the commitment by Arxo Finance to subscribe for US$10 million of the notes.
Negotiations for a syndicated senior debt facility secured, in part, by a political and commercial insurance wrap, are at an advanced stage, it said.
Generation Minerals has a free funded carry in respect of its 15% shareholding in Karo Platinum.
The project is scheduled to commence production with first ore milled in July 2024 and ground-breaking is expected to take place in December 2022.
