Staff Reporter
HARARE – Zimbabwe’s commercial banks have mobilised US$125 million to finance the expansion of state-backed Mutapa Gold Resources (MGR).
The funding will support the development of the Shamva Hill project and the expansion of Jena Mine.
The deal was signed in Harare on Thursday. It was arranged by CBZ Capital as lead advisor and involves at least eight financial institutions.
MGR had initially sought US$75 million. The facility was oversubscribed by US$50 million, highlighting growing confidence among local banks to finance large-scale mining projects.
The financing forms part of MGR’s wider US$250 million capital expenditure programme.
Of the US$125 million facility, US$75 million will go towards the Shamva Hill project. The remaining US$50 million will fund the expansion and rehabilitation of Jena Mine.
The 36-month facility includes a six-month grace period. Repayments will then be made over the remaining 30 months.
CBZ Bank and Ecobank Zimbabwe each committed US$25 million. CABS provided US$20 million.
NMB Bank and ZB Bank committed US$15 million each. FBC Bank and First Capital Bank provided US$10 million each, with additional participation from the AFC Commercial Bank consortium.
MGR chief executive Patrick Maseva-Shayawabaya said the oversubscription demonstrated strong confidence in the company’s growth strategy.
He said the funding would allow the company to immediately begin implementing the two projects.
However, Maseva-Shayawabaya said MGR would require additional capital to complete its broader investment pipeline.
At Shamva, the funding will support the development of the Shamva Hill open-pit mine, a processing plant and supporting infrastructure.
Shamva Gold Mine general manager Gift Mapakame said the project could increase annual production from about 0.8 tonnes to 2.4 tonnes of gold.
Construction is expected to begin later this year after completion of detailed engineering designs.
Commissioning is targeted for 2028.
The project is also expected to create about 1,800 jobs during construction and operations.
“The biggest beneficiaries of this project will be the community,” Mapakame said.
“Shamva Hill will bring with it a lot of employment opportunities and we’ll be able to take up close to around 1,800 employees, including contractors and owner employees.”
The project will also include investments in electricity and water infrastructure.
MGR is working with the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) and the Zimbabwe National Water Authority (ZINWA) to develop the supporting infrastructure.
The infrastructure will be designed with additional capacity to benefit surrounding communities.
MGR also expects the project to support education and healthcare services in the area.
At Jena Mine, the US$50 million allocation will finance a turnaround programme.
The initial focus will be on exploration to establish the mine’s resource base.
The company will then modernise its processing plant, which MGR says is inadequate for its long-term production targets.
The funding will also support the expansion and upgrading of Jena’s underground shafts.
Jena Mine general manager Alfred Madowe said the existing single-compartment shafts were limiting the mine’s ability to increase production.
The combined projects are expected to significantly increase MGR’s gold output.
CBZ Holdings Group general manager Patrick Matute said MGR was already Zimbabwe’s largest gold producer, producing about 115,000 ounces annually from Freda Rebecca, Shamva and Jena.
“Today, Mutapa Gold is already Zimbabwe’s largest gold producer, delivering around 115,000 ounces annually across Freda, Shamva and Jena,” Matute said.
“But the ambition we’re financing today goes much further.”
He said the Shamva Hill and Jena expansion could take MGR’s annual output beyond 220,000 ounces.
Matute described the transaction as “the making of a billion-dollar business.”
CBZ Bank managing director Valeta Mthimkhulu said the deal demonstrated the capacity of local banks to finance major capital projects.
She said the transaction could pave the way for larger projects funded through domestic balance sheets.
The investment comes as Zimbabwe seeks to increase mineral production and export earnings.
For MGR, the expansion is expected to strengthen its position as the country’s leading gold producer.
For the banking sector, the transaction provides a significant test of its ability to finance large-scale mining projects using local capital.
