Karo Mining Holdings (KMH) has officially listed the first fixed income instrument on the Victoria Falls Stock Exchange (VFEX) that will fund the Karo platinum project on the mineral-rich Greak Dyke.
KMH wholly owns Karo Zimbabwe which in turn holds 85% of Karo Platinum. KMH is 70% owned by Johannesburg Stock Exchange (JSE)-listed Tharisa.
The Zimbabwean bond market has not been active and the listing of Karo will revive the Fixed Income market and hence contribute towards development and deepening of capital markets.
Speaking at the listing ceremony, VFEX Vice chair Bartholomew Mswaka said Karo’s listing makes it the 7th issuer on the bourse.
“This asset class will give asset managers, wealth managers, fund managers and retail investors access to diversify their portfolios. We believe this will go a long way in reducing risk on investor portfolios,” said Mswaka.
“Our thrust as VFEX, is to increase the pool of asset classes on the exchange, and currently the VFEX management and staff are engaging various stakeholders and potential issuers in order to have a variety of securities on the bourse.”
Karo Mining has issued a US$ 50 million 3 year bond with an annual coupon rate of 9.5 percent which is paid semi-annually.
The group will over the next 2 years invest an amount in the region of US$400m in the development of a Tier 1, world class platinum group metal mine on the Great Dyke.
In phase 1, the project will produce 190,000 oz of platinum group metals (PGMs) per annum generating revenue in the region of US$380m to US$400m and creating 1,000 direct jobs in the immediately surrounding communities.
“It is important to note that the investment into the Karo Mining Holdings Bond comprises not just local but also significant foreign institutional and retail investors. This is a key signal to the global investment community that confidence is indeed growing in our economy and that Zimbabwe is indeed open for business,” said Finance and Economic Development Minister, Prof Mthuli Ncube.
The company commenced construction at the mine site last week marking what will arguably the largest mining operation in the country.
