Tharisa has acquired a 26.8% shareholding in Karo Mining Holdings for a total cash consideration of US$4.5 million to expand PGM operations in Zimbabwe.
Karo Holdings entered into an Investment Project Framework Agreement with the Republic of Zimbabwe on 22 March 2018, in terms of which Karo Holdings has undertaken to establish a platinum group metals (‘PGMs’) mine, concentrators, smelters, a base metal and precious metals refinery, as well as power generation capacity for the operations with surplus energy capacity made available to the Zimbabwe power grid.
The investment highlights include the following:
- The acquisition provides Tharisa access to an area covering 23 903 ha on the Great Dyke of Zimbabwe, containing an estimated PGM resource of some 96 Moz
- Great Dyke PGM projects are low cost, open pittable and have significant palladium and base metal content resulting in high margin poly-metallic revenues
- Low cost entry for Tharisa of $4.5 million with the right to increase its project ownership by way of further project level investments at discounted values through a farm-in option at various economic milestones
- Tharisa has the right but not the obligation to fund further development at the project level allowing Tharisa a measured approach to developing the projects in line with its financial and strategic objectives, thereby creating further low cost diversified PGM and chrome operations
- Tharisa continues to deliver on its diversification and growth strategy through the
implementation of Vision 2020 and strategic acquisitions such as the Salene Chrome
Zimbabwe transaction announced on 16 May 2018 and this acquisition.
“The company has established itself as a robust innovative Group with a proven track record of taking mines from prospecting to production and with strong cash generation and dividend payments," comments CFO Michael Jones.
"The Tharisa Group believes that coupled with its organic growth plans under Vision 2020 and the illuvial chrome prospects available through Salene Chrome, this acquisition has the potential to set Tharisa apart from its peers while delivering on its strategy of becoming a globally significant low cost producer of strategic commodities,” he adds.
The acquisition is unconditional and the effective date of the acquisition is 12 June 2018.