Tharisa raises R2.3bn in debt financing

Chrome and platinum group metals (PGM) miner Tharisa has raised a $130m (R2.3bn) debt facility from Société Générale and Absa Bank in a deal that it says will enable it to invest in assets and pursue growth objectives while maintaining a sustainable dividend policy.

Listed on the JSE and in London, Tharisa is developing the Karo platinum project in Zimbabwe at an estimated cost of $390m. The low-cost, open-pit PGM project is due to come on stream in July 2024, with initial production of 194,000oz expected.

“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,” Tharisa CFO Michael Jones said on Monday in a statement.

This agreement is “an excellent outcome for the company, and another key step in Tharisa’s development as not only a hugely innovative mining group focused on critical metals, but also a company committed to sustainable growth for the benefit of all of its stakeholders”.

The debt facility comprises a term loan of $80m and a revolving $50m facility, secured by commodity offtake agreements.

This capital raise followed the successful issue of a three-year $32m bond listed on the Victoria Falls Stock Exchange in December.

“Today’s facility is another piece of the comprehensive funding plan for the Karo platinum project. The facility represents a third of the $390m capex required to get first ore in the mill,” Tamesis Partners analysts said in a note.

“[The] facility leverages the strongly cash-generative Tharisa mine, which continues to be the engine room powering the company’s growth. The company remains on track to become a multi-asset and multijurisdictional group with the company progressing well into the construction phase at Karo.”

The share price ended 0.30% higher at R22 on the JSE, valuing Tharisa at about R6.6bn.

mahlangua@businesslive.co.za