HARARE, Jul. 24 (NewsDay Live) – Mutapa Gold Resources (MGR) has secured a US$125 million syndicated loan from a consortium of local banks, marking a major vote of confidence in the state-owned miner’s turnaround and signalling renewed lender appetite for Zimbabwe’s mining sector.
The facility, arranged by CBZ Capital as lead arranger, will finance the first phase of expansion projects at Shamva Gold Mine and Jena Mine, with the investment expected to almost double the company’s annual gold output over the next two years.
MGR chief executive Patrick Maseva Shayawabaya said the financing reflected growing confidence in the company’s operational performance as well as assurances provided by the Mutapa Investment Fund, the sovereign wealth fund overseeing the miner.
“I think a greater part of the credit really goes to them (Mutapa Investment Fund) for giving such assurance as the banks would have required to come to us,” Shayawabaya said.
“Obviously, the banks also have seen our performance and concluded that we are not such a bad risk.”
The transaction is one of the largest locally arranged financing packages for Zimbabwe’s mining industry and represents the first time Mutapa Gold has secured funding through a syndicate of domestic banks.
The loan will fund development of the Shamva Hill open-pit mine, construction of a new processing plant and expansion works at Jena Mine as the company seeks to increase production and improve operational efficiencies.
The facility has a 36-month tenure, including a six-month grace period, leaving the company with 30 months to repay the loan.
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Shayawabaya acknowledged the repayment period was shorter than is typical for mining finance.
“The facility is for 36 months, with a six-month grace period. So it means the repayment will be over 30 months,” he said.
“By standards of mining finance, it’s a fairly short-term loan. But that’s what the local market would provide.”
The transaction underscores improving confidence among local lenders in strategic mining investments after years of caution over operational, foreign currency and repayment risks.
It also highlights the growing role of the Mutapa Investment Fund in repositioning state-owned enterprises through governance reforms and improved commercial performance, helping them gain access to private sector financing.
Mining remains Zimbabwe’s largest export-earning sector but continues to face limited access to long-term capital needed to expand production and modernise operations.
The success of the syndicated loan could provide a model for future domestic financing of large-scale mining projects, reducing reliance on offshore lenders while deepening local participation in funding strategic industries.
