Miner Tharisa has successfully priced a $300m (R4.85bn) senior secured Nordic bond, the proceeds of which will be used to advance its Karo platinum project in Zimbabwe.
The $300m five-year senior secured bond was issued at 98% of principal, with a semi-annual coupon of 11.00% per annum. The bonds will be issued by Tharisa’s wholly owned subsidiary Arxo Finance, it said on Friday.
The offering was oversubscribed and attracted strong demand from a broad base of international institutional investors in Europe, the UK, the Middle East, North America and Asia, the group said.
This reflects support for Tharisa’s management, strategy and the development of the Karo platinum project, it said.
The proceeds will be applied primarily to complete the development and construction of the Tier 1 Karo project in Zimbabwe, where first ore to the mill is expected in the fourth quarter of the 2027 calendar year. Any remaining proceeds will be used for general corporate purposes.
DNB Carnegie and HSBC acted as joint bookrunners in connection with the offering, and the bonds will be listed on the Euronext Oslo Stock Exchange.
The efficiency of the corporate bond market was evident, with more than 150 investors engaging with the Tharisa growth story and a broad group supporting the offering
— Phoevos Pouroulis, Tharisa CEO
“This is a highly satisfactory outcome for Tharisa, enabling us to complete the Karo platinum project, more than double our platinum group metals [PGMs] output and add a second Tier 1 asset to our portfolio,” said Tharisa CEO Phoevos Pouroulis.
“The efficiency of the corporate bond market was evident, with more than 150 investors engaging with the Tharisa growth story and a broad group supporting the offering. We would like to thank investors for the time they have invested in understanding our business, and we look forward to maintaining these relationships and building our credit story over time.
“This response follows our continued operational de-risking of the project and the conclusion of key regulatory and commercial agreements, including the special mining lease agreement [SMLA] and the Valterra offtake agreement.”
Business Day reported last month that the Karo project had secured a five-year agreement with Valterra Platinum to buy PGMs and other metals produced at the mine as the project moves closer to production.
The agreement has an initial five-year term.
The deal comes three days after Karo signed a 25-year SMLA with the Zimbabwean government, securing its rights to develop the project and the fiscal terms that will apply to the mine. The lease agreement followed several years of development work on Karo, with construction beginning in 2022 and pilot mining starting in 2023. Tharisa has invested more than $240m in the project to date.
Karo’s development has taken longer than initially expected, with the project having been affected by weaker PGM prices and the need to finalise its fiscal arrangements, according to Tharisa.
The first phase of Karo is designed to produce about 226,000oz of PGMs a year once it reaches full production. The project is located on Zimbabwe’s Great Dyke, one of the country’s major mineral belts.
Business Day