The transaction will increase Tharisa’s stake in Karo Holdings from 26.8% to 66.3%
Cyprus-based platinum group metals (PGM) producer Tharisa has executed its option to farm-in and acquired a controlling stake in the holding company of Karo platinum project (Karo Holdings) for total consideration of $27m.
Under the terms of the deal, the company will increase its stake in Karo Holdings from 26.8% to 66.3%, by issuing 13.69 million new Tharisa shares to The Leto Settlement, which will retain the remaining 33.7%.
The Karo platinum project is located within the Great Dyke in the Mashonaland West District of Zimbabwe, around 80km southwest of Harare and 35km southeast of Chegutu.
It has initial probable reserves of 35.5 Mt at 2.31g/t and 2.6Moz and a 3PGE+Au resource prill split favouring platinum, palladium, rhodium, and gold with material base metal credits.
The mining lease area covers 23,903ha of area, with an initial 20-year life of mine and project post-tax net present value totalling of $770.4m at current PGM prices.
The project is positioned within a designated Special Economic Zone (SEZ), in the southern portion of the middle chamber of the Great Dyke, a PGM bearing geological feature, and is supported by good infrastructure.
Tharisa CEO Phoevos Pouroulis said: “The development of a strategically significant tier one, high-grade, high-return, low-cost PGM resource is a natural evolution for Tharisa as it fulfils its strategy of becoming an integrated diversified developer of new metal assets.
“Tharisa will develop and deliver its next PGM mine, Karo Platinum, in a world-class geological district that is supported by a pro-mining environment.
“The investment and development of the Karo Project will create noteworthy employment and upliftment opportunities for the communities within the project area, as well as the creation of an economic hub with significant multiplier effects.”
In addition to the acquisition, the company has also revised the Investment Project Framework agreement, signed between the Republic of Zimbabwe (ZWE) and Leto in 2018.
Under the amended agreement, Karo Platinum, an indirect subsidiary of Karo Holdings will be owned by another subsidiary Karo Zimbabwe with 85%, and ZWE with remaining 15%.
Tharisa said that the transaction is in line with its growth strategy, including geographic diversification, operating low-cost open pit operations with access to premium metals.
As part of the mining plan, the company will target mining 2.1Mtpa of run of mine material for the Phase 1 operations, at a grade of 3.0 g/t (5PGE+Au).
The mining operations will include development of four sequential open pits, up to a maximum depth of 100m over a total strike length greater than 20km.
In the phase 1 operations, the company aims to process 175ktpm of ROM, through an MF2 PGM flotation circuit, producing 150kozpa of PGM concentrate, in the LOM of 20 years.
Pouroulis added: “The long-life Karo Project, when added to the more than 60-year LOM of the Tharisa PGM and chrome operations in South Africa, sets the foundation for Tharisa’s growth, particularly in the downstream value- enhancing beneficiation sector.
“The development of the Karo Project will significantly consolidate Tharisa as one of the world’s most forward-thinking and low-cost producers of PGMs in Africa.
“With the challenges and uncertainty to the supply chain of these vital precious metals, a new short dated source of primarily platinum and palladium metals is a significant risk mitigant for global users and provides security and certainty of supply.”