Karo to start trial mining at new Selous platinum project, secures more funding


Karo Platinum says it plans to start trial mining shortly to test the resource at its new US$391 million mine at Selous.

The company says “extensive earthworks” at the site have started. Karo has awarded contracts for the pouring of the foundations for all plants and infrastructure, and for installation for a 31km high-voltage power line plus transformers. Long-lead items for the project have been ordered, the company says in an update.

Karo is to start trial mining with 30,000 tonnes of ore, “to provide further information on drilling, blasting, grade control and processing.”

In December, Karo raised US$31.8 million by issuing bonds on the Victoria Falls Stock Exchange. As the issue closed this week, a further US$5 million was raised, bringing the total to US$36.8 million.

“As previously announced, all proceeds from the Bond will be applied to part fund the Karo Platinum Project – a development stage, low-cost, open-pit platinum group metals asset, located on the Great Dyke in the Republic of Zimbabwe,” said Karo in a notice to the Johannesburg Stock Exchange on Friday.

Karo’s holding company, Tharisa, announced in March that it had raised US$130 million in a debt facility from France’s Société Générale and South Africa’s Absa Bank. Karo expects the first production at the mine to start in 2024.

“Tharisa’s Vision 2025 strategy of reaching optimal and sustainable production from the Tharisa mine remains intact, and we will benefit from the significant progress being made at Karo, our second tier one mine – which remains on time and budget for first ore to the mill in H2 2024, as we continue to evolve into a multi-asset/multijurisdiction PGM producer,” says Phoevos Pouroulis, CEO of Tharisa.

When complete, Karo Platinum is projected to produce up to 194,000 ounces of PGMs per year. This would make Tharisa a 400,000 oz/year PGM producer. At average PGM 6E prices of US$2,140/oz and costs of US$1,096 per PGM ounce, Karo would make a return on capital invested of 30.1% and an internal rate of return of 26.1%.

The Zimbabwe government has a free-carry 15% stake in the project. Free carry means that the government doesn’t have to pay for the shares or contribute any equity capital. Government also has the option to buy another 11%, but would have to pay for it should it choose to take it up. Based on Karo’s valuation of around US$686 million, the government would have to spend US$75 million for that extra share.

ALSO READ | Top banks agree to lend US$130m for Karo Platinum mine expansion