In race for capital, GDI sells a stake in Darwendale platinum project to local firm Fossil

Zimbabwe Russia Platinum Great Dyke
Construction of the 'box cut' at the GDI site at Darwendale. The box cut is the first step in excavation, providing a portal into the underground mine

Great Dyke Investments (GDI), a Russian-backed project planning to build Zimbabwe’s biggest platinum mine, has sold a 4.4% stake to Fossil Mines as Covid-19 disrupted fundraising for the venture.

Fossil, owned by GDI board member Obey Chimuka, will invest US$30 million in the Darwendale project, through a combination of cash and services, including for engineering, procurement and construction. That leaves tycoon Vitaliy Machitski’s Vi Holding and Zimbabwe’s Landela Mining Venture each with a 47.8% stake. The sale values GDI at US$680 million.

In September, GDI announced that the African Export-Import Bank (Afreximbank), the lead arranger for project funding, had completed due diligence on the project, allowing the company to start raising capital.

However, GDI Chief Executive Officer Alex Ivanov said the coronavirus pandemic has delayed project fundraising, which was originally due to be completed this year.

Financing of US$665 million is now expected to be finalised in the first quarter of 2021, Ivanov said in an emailed response to questions.

So far, GDI has spent about US$100 million, including on geological exploration and construction of two mine portals and surface infrastructure, the company said previously.

GDI: production plans

GDI expects to mine the first ore in 2021 and at its peak produce 860,000 ounces of platinum group metals and gold per year, making it the biggest mining venture in Zimbabwe.

Zimbabwe has the world’s third-largest platinum group metal reserves after South Africa and Russia. Former president Robert Mugabe handed the Darwendale concession to Russian investors in 2006 after the government repossessed land from a local unit of South Africa’s Impala Platinum Holdings.

Chimuka joined the GDI board in October 2019 when Landela, owned by his associate Kuda Tagwirei, became the joint venture partner in the mine. GDI is chaired by David Brown, former CEO of Impala Platinum, one of the companies that GDI has reportedly approached for possible investment at the Darwendale project.

If successful, GDI will join Zimplas and Anglo American Platinum in producing the precious metal in the country.