Tharisa, the JSE-listed miner currently building the Karo Platinum mine in Zimbabwe, says it has raised US$130 million in a debt facility secured by production.
The company, which began work on the US$391 million platinum project at Selous last year, said the facility from France’s Société Générale and South Africa’s Absa Bank has a 42-month tenure. It is made up of a term loan of US$80 million and a revolving US$50 million facility, secured by commodity offtake agreements.
In 2022, Karo listed three-year bonds on the Victoria Falls Stock Exchange and raised US$31.8 million, helping the company raise funding for the new mine.
“The Société Générale and Absa senior debt facilities, as well as the significant free cash flow generated from the Tharisa Mine, provide significant flexibility to Tharisa’s capital allocation policy,” Michael Jones, CFO of Tharisa, said in a statement Monday.
Last year, the company said it would raise money through the bond listing, plus US$260 million in project finance and US$130 million by leveraging the company’s assets.
“This debt raise forms part of our strict approach to capital allocation and combines ongoing investment in our producing mining operations and our growth projects,” Jones added.
Karo expects the first production at the mine to start in 2024. 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%.