Tharisa PLC (LSE:THS, JSE:THA, OTC:TIHRF), the platinum group metals (PGMs) and chrome co-producer has announced the opening of a fixed income note offer by its Karo Mining Holdings PLC subsidiary to raise US$50mln.
The offering will be listed by way of introduction on the Victoria Falls Stock Exchange (VFEX) and the proceeds from the bond will be applied to part fund the Karo Platinum Project.
The capital raise forms part of a broader capital strategy by Tharisa to develop the Karo Platinum Project in Zimbabwe on time and on budget.
In a statement, Phoevos Pouroulis, CEO of Tharisa, commented: "This is a historic moment for Tharisa and our tier-one Karo Platinum Project on the Great Dyke in Zimbabwe. From our discussions to date with potential investors, both in Zimbabwe and abroad, we have received extremely positive feedback for this robust investment opportunity, boasting highly attractive returns. We expect strong participation from Zimbabwean investors in particular. This interest stems from Tharisa's strong track record in developing projects on time and on budget, as well as the outstanding fundamentals of the Karo Platinum Project."
Tharisa is a 70% shareholder in the Issuer, a company incorporated in the Republic of Cyprus, which in turn indirectly owns 85% of the Karo Platinum Project, with the Government of Zimbabwe holding the remaining 15% of the project, on a free carry basis.
Pouroulis noted: "Zimbabwe has indicated it is open for business and through our interactions with all levels of Government, it is clear there is strong commitment to support Tharisa as we develop the Karo Platinum Project into a fully producing PGM mine. We look forward to welcoming investors on this exciting journey into a new operating jurisdiction.
"Our investment commitment by guaranteeing the bond and investing US$10mln in the Notes demonstrates Tharisa's support for not only the project but the economics of the bond, benefitting from the protections afforded to investors by the Special Economic Zone."
The Karo Project is scheduled to commence production with first ore milled in July 2024. Ground-breaking is expected to take place in December 2022. A local earthworks contractor has been appointed and is expected to start onsite activities in December 2022, marking the beginning of the Karo construction phase.
The proceeds from the issue of the bond, net of costs, will be used to part fund the development of the Karo Platinum Project, which has a total capital cost for phase one of US$391 million and is set to be the second world-class asset in Tharisa's portfolio.
Bernard Pryor, MD of Karo Mining Holdings, commented: "Developing a tier-one project in this unique geological setting comes once in a lifetime. Funding for any mining project remains key and I am delighted that we have not only received support from Tharisa in the form of early equity, but that Tharisa has committed to anchor this proposed bond raise. I look forward to engaging with stakeholders in Zimbabwe and beyond to ensure this Bond raise is completed successfully."
The bond is US dollar denominated and will be issued in minimum denominations of US$2,500 by way of a private placement. The bond is not rated and will be guaranteed by Tharisa. The minimum amount to be raised from the bond is US$25 million. Should applications for less than this amount be received the bond issue will not proceed.
The issuer reserves the right to increase the total aggregate issue amount, subject to approval by its board and the guarantor, by delivering notice thereof to noteholders. The VFEX has approved the listing of the bond on the VFEX, a subsidiary of the Zimbabwe Stock Exchange and established in a Special Economic Zone. Participation in the bond will be by way of private placement and is not restricted to Zimbabwean financial institutions or residents.
Arxo Finance PLC, a wholly owned subsidiary of Tharisa, which was established to provide funding to Tharisa group companies, has committed to subscribe for US$10mln of the notes,