dyton mupawaenda
Nelson Gahadza-Business Reporter
MUTAPA Gold Resources has secured a US$125 million syndicated financing facility from a consortium of local financial institutions to fund the expansion of Shamva Hill open-pit gold mine.
This is a major vote of confidence in Zimbabwe’s mining sector and the capacity of local banks to finance large-scale investments.
The syndicated facility, one of the largest ever arranged exclusively by local banks for a mining project, exceeded the firm’s initial funding target of US$75 million by US$50 million.
Additional funding will be channelled towards expanding operations at Jena Mine and accelerating Mutapa Gold Resources’ long-term growth strategy as the company seeks to increase gold production.
The financing package was led by CBZ Capital with a US$25 million commitment, alongside Ecobank (US$25 million), CABS (US$20 million), NMB Bank (US$15 million), ZB Bank (US$15 million) and FBC Bank (US$10 million).
Commitments amount to US$110 million, with additional participating institutions expected to complete the balance of the syndication.
The financing agreement is being viewed as a significant milestone for Zimbabwe’s financial services sector, reflecting growing confidence among local banks in the mining industry’s prospects and their ability to support capital-intensive projects.
Speaking at the signing ceremony, Shamva Mine manager Engineer Gift Mapakame said the transaction represented more than the financing of a mining venture.
“This is a demonstration of what can be achieved when capital, technical expertise, institutional confidence and a shared vision come together,” he said.
Eng Mapakame said while transactions of this nature are often concluded away from the public eye, the significance of the facility warranted public recognition.
“This will go down in history as a momentous event because it represents a turning point where the financial services market has become receptive to the national development agenda and recognises mining as the cornerstone of driving that agenda,” he said.
He said the syndicated financing structure demonstrated the growing sophistication of Zimbabwe’s banking sector, which has traditionally been perceived as lacking the depth to finance large-scale mining developments.
The Shamva Hill expansion had been under development for the past five years as part of the company’s strategy to first stabilise underground operations before embarking on major expansion.
Market conditions, characterised by strong international gold prices, proven mineral resources, improved extraction technologies and increased investor interest, had created favourable conditions for the investment.
Once operational, the Shamva Hill expansion is expected to increase annual gold production at Shamva Mine from around 0,8 tonnes to 2,4 tonnes a year, representing a 264 percent increase.
The additional output is projected to contribute about six percent of Zimbabwe’s national gold production and further strengthen Mutapa Gold Resources’ position as the country’s largest gold producer.
The project is also expected to generate significant socio-economic benefits through investments in critical infrastructure, including water and electricity systems, healthcare facilities and educational institutions.
Approximately 1 800 jobs are expected to be created during the construction and operational phases.
CBZ Capital managing director Mr Patrick Matute said the successful arrangement of the facility reflected the maturity and growing capacity of Zimbabwe’s banking sector.
“The industry is now mature enough to fund projects of such significance,” he said.
Mr Matute described the transaction as a transformative investment that would create substantial long-term value.
“We are witnessing more than the financing of a project. We’re witnessing the making of a billion-dollar business. At prevailing gold prices, what we’re witnessing today will become a billion-dollar business,” he said.
Mutapa Gold Resources chief executive Mr Patrick Maseva-Shayawabaya said the overwhelming response from local financial institutions had surpassed the company’s expectations.
“When we went into the market, we were looking for US$75 million. The financial services industry in Zimbabwe surprised us. We have raised US$125 million,” he said.
The oversubscription of the facility provides the company with additional flexibility to pursue expansion opportunities beyond the Shamva Hill project.
Mr Maseva-Shayawabaya said part of the additional funding would be invested in expanding Jena Mine through exploration, resource definition and processing plant upgrades.
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