Karo Mining secures US$225m debt funding for plati...

Karo Mining secures US$225m debt funding for platinum project

Nyashadzashe Ndoro

Chief Reporter

Victoria Falls Stock Exchange listed platinum mining giant, Karo Mining Holdings has announced that it is at an advanced stage of securing US$225 million in debt funding to complete the construction of its platinum project in Zimbabwe.

This development is a significant milestone for the company, which has been working to bring the project to fruition.

The Karo Platinum Project, which is expected to start production in 2026, has been delayed due to funding challenges.

In addition to the debt funding, Karo Mining has also received US$107 million from its parent company, Tharisa Plc, to support the project's construction. The company is also exploring additional funding options, including an equity partner, to cover the remaining US$31.2 million needed to complete the project.

Karo Mining Holdings has been working to develop the Karo Platinum Project, which is expected to produce platinum group metals. The project has been delayed due to funding challenges, but the company is confident that it will be able to meet its revised timeline.

The company's financial statements for the year ended 30 September 2024 show that it has been able to settle its obligations as they fell due without challenges. The directors of the company have also prepared scenarios to match the project commitments and funding availability, should it be required to maintain available funds for the foreseeable future.

In a separate development, Karo Mining Holdings has issued 1782 ordinary shares to Tharisa Plc for a total consideration of US$12.8 million. The company has also utilised a US$65 million equity line and has availed an additional US$70 million equity line to fund project working capital needs.

"As of the date of signing the financial statements, construction of the Karo Platinum Project was still in progres.

" Tharisa pic has been following through on its commitment to fund the first US$135million of the project budget through equity and equity type instruments and also to provide various parent company guarantees in order for the Group to secure the additional debt. As at the reporting date US$107million had been received from Tharisa plc for utilisation on the ongoing construction work," the company noted.

"Furthermore, management is at an advanced stage to secure debt funding amounting to US$225 million for the completion of the project construction and the balance of US$31.2million through an equity partner. In the current financial year, the US$65 million equity line that had been availed by Karo Mining Holdings in prior year, was fully utilised for the project and a further US$70million equity line was availed and is being drawn down to fund project working capital needs as they fall due.

"The directors have and will continue to review the spending, investment and commitments in the project; and have prepared scenarios to match the project commitments and funding availability should it be required to maintain available funds for the foreseeable future.

"Consequently, the directors consider that, as at the date of approval of the consolidated financial statements, the Group will continue to operate for the foreseeable future. Accordingly, the Company has continued to adopt the going-concern basis in the preparation of the Group's consolidated financial statements.”