Story by Theophilus Chuma
MUTAPA Gold Resources has secured US$125 million from a syndicate of seven local banks to finance the expansion of the Shamva Hill Project, a development expected to increase production at one of Zimbabwe’s largest gold mining operations and strengthen the company’s ambition to become a billion-dollar business.
The financing package, signed in Harare on Thursday, exceeded the company’s initial target of US$75 million and will fund the development of the Shamva Hill open-pit mine, which is projected to produce two million tonnes of ore annually.
Mutapa Gold Resources Chief Executive Officer Patrick Maseya Shayawabaya said the overwhelming response from local lenders reflected growing confidence in the company’s expansion strategy.
“We went into the market looking for US$75 million as the first tranche of financing for the Shamva Hill Project. The financial services industry in Zimbabwe surprised us. By the time all participating institutions had signed, we had secured US$125 million, which is US$50 million above our initial target,” he said.
Shayawabaya said the additional funding would be channelled towards expanding operations at Jena Mine.
“That additional US$50 million will now be allocated to Jena Mine, where significant work is required to define the resource base and expand the processing plant. I believe this investment will prove to be money well spent, and I would like to thank the banks for their confidence and support,” he said.
The financing marks one of the largest syndicated mining facilities arranged by local financial institutions and is expected to accelerate Mutapa Gold’s production growth.
CBZ Capital General Manager Patrick Matute said the facility was oversubscribed after participating banks completed their assessment of the project.
“Mutapa Gold initially sought US$75 million, and six banks came together to assess the project. Following engagements with management and due diligence, the facility was oversubscribed, resulting in US$125 million being raised,” he said.
Matute said further funding would still be required to complete the project but expressed confidence that regional financiers could bridge the remaining gap.
“The Shamva project requires funding beyond this amount, but the remaining gap is relatively small and can be addressed through other financing avenues. We also expect regional financial institutions, including the African Development Bank and the Africa Finance Corporation, to participate in supporting projects at Freda, Shamva and Jena,” he said.
He added that the planned investments could significantly transform the group’s production capacity.
“We believe Mutapa Gold is currently the country’s largest gold producer and, with these investments, has the potential to significantly increase production and generate revenues of around US$1 billion within the next three to four years,” Matute said.
Shamva Gold Mine General Manager Engineer Gift Mapakame said construction of the open-pit mine and a new processing plant would be completed within the next 18 to 24 months.
“We have set a target for 24 months to ensure that we complete the processing plant and for it to be ready for commissioning by 2028,” he said.
Mutapa Gold Resources expects the investment to raise annual gold production at Shamva Gold Mine from 300 kilogrammes to 570 kilogrammes, reinforcing the company’s position as Zimbabwe’s largest gold producer while supporting growth in the country’s mining sector.
