Mutapa Gold pulls off fundraising masterclass, raises US$125m for Shamva

Mutapa Gold pulls off fundraising masterclass, raises US$125m for Shamva

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HARARE — Eight Zimbabwean banks have jointly raised US$125 million to expand Mutapa Gold Resources’ Shamva and Jena operations, in what the company described as the first all-local syndicated loan of its scale for a mining project.

The 36-month facility was signed at Mutapa Gold’s head office in Harare on Thursday. It was arranged by CBZ Capital and drew commitments US$50 million above the miner’s initial US$75 million target.

Under the syndication, CBZ Bank and Ecobank Zimbabwe committed US$25 million each, CABS US$20 million, and ZB Bank and NMB Bank US$15 million each. FBC Bank and First Capital Bank contributed US$10 million each, while AFC Commercial Bank put in US$5 million. The funding was raised entirely from local institutions.

Mutapa Gold Resources chief executive Patrick Maseva-Shayawabaya said the oversubscription would allow the company to expand its plans beyond the original scope.

“The financial services industry in Zimbabwe surprised us,” said Maseva-Shayawabaya. “When all those participating have signed, the amount that we have raised is US$125 million — US$50 million more than the US$75 million that we wanted. That US$50 million is what we’re going to allocate to Jena.”

He attributed lenders’ willingness to participate to assurances linked to the Mutapa Investment Fund, the sovereign wealth fund that owns the miner, as well as the company’s operating record.

“A greater part of the credit really goes to them for giving such assurance as the banks would have required to come to us,” he said. “Obviously, the banks also have seen our performance and concluded that we are not such a bad risk.”

Maseva-Shayawabaya also acknowledged the relatively short tenor of the borrowing for a mining project, noting that the facility includes a six-month grace period, leaving 30 months for repayment.

“By standards of mining finance, it’s a fairly short-term loan,” he said. “But that’s what the local market would provide.”

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Of the US$125 million, US$75 million is earmarked for the Shamva Hill open-pit project, part of a development the company has costed at about US$152 million. The remaining US$50 million will be directed to Jena Mine. Mutapa Gold’s wider capital programme has been put at roughly US$250 million.

Shamva Gold Mine general manager Engineer Gift Mapakame said the investment would lift annual output from about 0.8 tonnes of gold to 2.4 tonnes. He said the increase would add the equivalent of about six percent of national gold production.

He said Shamva Hill is expected to grow from around 66kg a month to 200kg, while freeing processing capacity at Freda Rebecca, whose output is projected to rise from around 204kg to 270kg a month.

Group production is targeted to climb from roughly 300kg to 570kg a month by 2029, taking annual output beyond 220,000 ounces.

“We’ve lived with this dream, we’ve lived with this strategy, for about five years,” Mapakame said. “The timing couldn’t have been better than what it is right now. We’ve got a good mineral resource, the market is booming in terms of gold trading, and the appetite and capital is also there.”

Site works are expected to begin in September, with mainstream construction towards year-end. Commissioning is targeted for 2028 after a 24-month build. The expansion is projected to lift Shamva’s workforce from about 1,000 to 1,800, including contractors.

The project will also fund bulk water and power infrastructure designed with spare capacity for surrounding communities, developed in consultation with ZINWA and ZETDC, according to the company.

At Jena, general manager Alfred Madowe said the US$50 million allocation would first fund exploration to improve resource certainty, then rebuild a processing plant he said is dilapidated and too small for the mine’s targets. The mine’s single-compartment shafts would also be expanded to handle higher tonnage.

Speaking for the consortium, CBZ Capital managing director Patrick Matute said the transaction could be a foundation for significant growth.

“We’re witnessing more than the financing of a project. We’re witnessing the making of a billion-dollar business,” said Matute, arguing that at prevailing gold prices, a path from around 115,000 ounces a year to more than 200,000 could place Mutapa Gold among Zimbabwe’s largest corporates.

While those projections depend on sustained gold prices and successful delivery of the expansion, the immediate significance of the agreement is the size of the all-local bank syndication for Zimbabwe’s mining sector.

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