Mutapa Gold secures US$125m loan facility for Shamva Hill project

STATE owned miner Mutapa Gold Resources (MGR) has secured a US$125 million syndicated loan from local banks to finance the development of its Shamva Hill Project.

The banking syndicate includes: CBZ Bank (US$25 million), Ecobank (US$25 million), CABS (US$20 million), ZB (US$15 million) NMB (US$15 million), FBC Bank (US$10 million), First Capital (US$10 million) and AFC Commercial Bank (US$5 million).

Speaking at the loan signing ceremony, Shamva Mine General Manager, Gift Mapakame, said the financing fulfilled a strategy that had been in place since 2021.

Mapakame said the project would increase Shamva Mine’s annual gold production by 264%, from approximately 0.8 tonnes to 2.4 tonnes, contributing an additional 6% to Zimbabwe’s national gold output.

“We are basically going to move from a production platform of 0.8 tons per year to about 2.4 tons, which is about 6%, an increment of 6% contributing to the national gold production, which is quite huge,” Mapakame said.

Beyond increased production, he said the project would deliver lasting benefits to surrounding communities through investments in water and electricity infrastructure, healthcare, education and employment.

He said Shamva Hill was expected to create around 1,800 jobs, including permanent employees and contractors during construction and operations.

“The biggest benefactors of this project will be the community. The bulk infrastructure that we are putting in place, including water and power, is being designed not only to support Shamva Mine but also to cater for surrounding communities.

“We are engaging ZINWA and ZETDC to ensure the infrastructure has built-in capacity that communities around us will also be able to tap into.”

Early works of the project are expected to begin in September, with mainstream construction commencing towards the end of the year before commissioning in 2028.

MGR Chief Executive Officer Patrick Shayawabaya said the financing would transform production across the group’s three mining operations, with Shamva Hill becoming the cornerstone of the company’s expansion strategy.

Shayawabaya said the additional US$50 million would be channelled towards expanding Jena Mines, where production is targeted to more than double from about 45kg to 100kg, while the rest goes to the Shamva project.

“The financial services industry in Zimbabwe surprised us. By the time all participating institutions have signed, we will have raised US$125 million, which is US$50 million more than the US$75 million we were looking for.

“So that 50 million dollars is what we’re going to allocate to Jena,” he said.