Zimbabwe's Karo Platinum Mine Secures US$300 Million Bond Financing to Advance Toward Production by End-2027

en.Wedoany.com Reported - Tharisa has secured US$300 million in bond financing to advance its Karo platinum mine project in Zimbabwe. The development project has a total investment of US$545 million, and this financing covers a substantial portion of the remaining funding requirement, with the company targeting first ore by the end of 2027.

The five-year senior secured Nordic bond carries a coupon of 11% and was issued by Tharisa's wholly owned subsidiary Arxo Finance Plc at 98% of par, attracting oversubscription from more than 150 institutional investors. The proceeds will initially be held in escrow and released once conditions are met, primarily to fund the development and construction of Karo. The bond provides funding as the project enters its peak construction phase and broadens Tharisa's funding base beyond traditional bank debt and equity financing, bringing international fixed-income investors into the company's expansion plans.

Tharisa had previously estimated Karo's development cost at approximately US$545 million and disclosed that it has already invested about US$241 million in the project. The latest bond covers a significant portion of the remaining funding requirement. The company expects first ore to enter the processing plant in the fourth quarter of 2027.

Karo Phase 1 is designed to produce approximately 226,000 ounces of platinum group metals (PGMs) per year, which will bring considerable new output to Zimbabwe's established platinum industry. The project is located on Zimbabwe's Great Dyke, one of the world's major PGM-bearing geological formations. Tharisa expects its PGM production to more than double once Karo is fully developed. The project will give Tharisa a second Tier 1 PGM asset and add a major mine to Zimbabwe's platinum industry, which currently includes Zimplats, Unki and Mimosa.

The Zimbabwean government, through Generation Minerals, holds a 15% free carried interest in Karo, directly aligning the project with the country's mineral development objectives as the nation seeks to attract more capital into mining and smelting operations.

Two developments preceded the financing. On August 20, Tharisa signed a special mining lease agreement with the Zimbabwean government, strengthening Karo's long-term mining tenure and fiscal framework; the company also signed a long-term offtake agreement with Valterra for the project's PGM concentrate, securing a market for part of the output before the mine begins producing.

Weakening PGM prices and tighter financing conditions had previously affected Karo's development progress, and this financing marks a turning point for the project. With platinum prices recovering, the project is accelerating, and the external environment for Tharisa's expansion into Zimbabwe has improved accordingly. In early September, platinum was trading above US$1,800 per ounce, and Tharisa's PGM spot basket price was approximately US$2,719 per ounce. Tharisa's chrome business remains a strategic component in funding its PGM growth, with chrome spot prices at approximately US$290 per tonne. CEO Phoevos Pouroulis said Karo is now positioned to enter its peak construction phase with confidence.

While developing Karo, Tharisa is also advancing the transition of its namesake mine in South Africa from open-pit to underground mining. The Apollo underground mining complex commenced development in March and is approaching first ore, targeting a steady-state production level of 255,000 tonnes per month by the third quarter of 2029; the Orion complex is expected to follow, targeting first ore in fiscal year 2031. Together, the two underground complexes are expected to extend the South African mine's operating life by more than 60 years after the existing open-pit mine is depleted.

For Karo, the priority now is construction, and the US$300 million bond provides most of the funding needed to drive the project toward its 2027 production target.