MUTAPA Platinum Group of Metals (MPGM) is courting investors to raise US$450 million needed to revive the long-delayed Darwendale platinum project.
The funding will support the development of an open-pit mine, a concentrator plant and the initial underground mine infrastructure.
MPGM chief executive officer Munashe Shava said the company is restructuring the project to improve its appeal to both investors and financiers.
“For the processing plant and the development of the underground (infrastructure), we are looking at about US$450 million, but that is not going to be a lump sum. We are going to split that into phases,” Shava told businessdigest.
The funding drive represents a major milestone in efforts to revive Darwendale, previously developed under Great Dyke Investments (GDI). The project stalled despite significant progress having been made in construction and mine planning.
According to Shava, the immediate priority is to get the asset into operation while establishing a sustainable business model capable of attracting long-term investment.
“The most important strategic focus for us is to operationalise the GDI Darwendale project,” he said.
“As we speak, the focus is to develop a model that can demonstrate sustainability, efficient extraction and the capability to create value going forward. This is where we are in terms of trying to build that model so that it can attract inflows of capital in the form of investors or funders.”
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The Darwendale project could be one of Mutapa Investment Fund’s flagship mining initiatives as the sovereign wealth fund seeks to unlock value from strategic national assets and draw fresh investment into Zimbabwe’s mining sector.
Shava said the project’s attractiveness extends beyond the size of its mineral resource. Existing infrastructure already in place substantially reduces development costs and investment risk.
“It is a world-class asset. We have got a water body close by, we have got the road network, a surfaced road passing through the concession, power is within five kilometres and Norton is within 20 kilometres, so everything is there,” he said.
Unlike many greenfield mining projects that require heavy upfront investment in roads, electricity and water infrastructure before production can begin, Darwendale already has many of the fundamentals in place.
“The resource itself is very amenable to mining methodologies, open pit and also underground. It is very shallow dipping, with the deepest point being about 400 metres, so everything is there,” Shava said.
To improve the project’s bankability and increase its prospects of securing funding, MPGM has opted for a phased development strategy instead of immediately pursuing full-scale operations.
The company intends to begin production at around 1,2 million tonnes per annum before steadily expanding capacity as additional funding and internally-generated cash flows become available.
“The resource is big and as such the development strategy is a phased approach where we are going to start with something like 1,2 million tonnes per annum,” Shava said.
“This is also to enable us to access the funding that we need to access, and we are comfortable that with a 1,2 million tonne capacity facility we should be able to access that as soon as possible.”
The phased approach is expected to lower upfront capital requirements while allowing the company to establish production and begin generating revenue much earlier than would be possible under a fully-developed mine plan.
However, management’s ambitions for Darwendale extend far beyond the initial phase.
The project’s feasibility study envisages a mine capable of processing up to 10 million tonnes annually once fully developed.
“So, yes, we will start at 1,2 million tonnes, but we would rapidly grow that capacity to enable us to get to the level that we believe we should be operating from, looking at the size of the asset that we have got,” Shava said.
The first phase will focus on constructing the concentrator plant and developing the open-pit operation, laying the groundwork for future expansion.
MPGM also plans to reinvest cash generated from early production into underground mine development and additional processing infrastructure, gradually reducing its dependence on external financing.
