THARISA is in talks with North American and European government-backed lenders to help finance the outstanding $300m of its Karo platinum group metals project in Zimbabwe, the firm’s CEO said on Wednesday.
“We’re speaking to government-backed funders from North America, from Europe — they’re in the mix as well, along with offtake players and potential downstream users,” said Phoevos Pouroulis in an interview.
Funding options for the $545m project had improved following the improvement in the platinum price last year. “It’s opened up the playing field considerably,” said Pouroulis of financing the project’s balance.
“It’s really around that thematic, the general view, that PGMs are going to be around longer and stronger than previously anticipated, given supply constraints”, he said.
“The theme of security of supply is very relevant, and people who were not really on our list a year ago are now having serious conversations and showing serious intent around supply security,” he said.
Karo is scoped to produce 226,000 ounces a year in PGMs in its first phase. Of the total capital expenditure, Tharisa has committed $190m in equity and has raised $37m through a bond issuance on the Victoria Falls Stock Exchange of which it netted $26m. In addition, Tharisa is in advanced discussions to borrow $200m from a lender syndicate.
Roughly $121m was for “strategic investors” which is also thought to include Impala Platinum. Its CEO Nico Muller said last month the company was looking to secure a possible concentrate offtake agreement with Karo which could be backed with an equity stake. Implats has previously bought concentrate for toll-treating from Tharisa.
Tharisa is now looking at different configurations for funding the $300m balance (strategic stake and lender syndicate). “We’ve had a lot of inbound interest and a lot more optionality around funding,” said Pouroulis. However, concluding funding depends on whether the company can extract a fiscal deal with the Zimbabwean government.
Tharisa is seeking a package containing duty exemptions on certain goods, a 15% corporate tax, and to keep sales in dollars. Tharisa CEO Phoevos Pouroulis said in December he hoped to conclude discussions early this year.
Said Pouroulis: “The world has changed in 12 months. A year ago it was a very difficult sell — PGMs at a low price, and then Zimbabwe was challenging in terms of fiscal policy, and the challenges that the other incumbents were facing, particularly around the ZiG conversion”.
