By:Africaminingmarket

Kavango, which is developing gold mines in Zimbabwe, has secured a US$5 million interest-free facility from the Comarton Managed Pension Funds’ Investments Consortium for mine development, including building a gold processing facility.

The funding provides a stepping stone to listing on the US dollar-denominated Victoria Falls Stock Exchange.

Importantly, investment will help develop new gold production capacity in a country largely dependent on bullion exports, the country’s single largest export earner.

In 2025, Zimbabwe has set an ambitious goal of producing 40 tonnes of gold. This follows a record 36,48 tonnes produced in 2024.

Mr Ben Turney, the group’s chief executive, said central to its strategy in Zimbabwe was to promote local shareholder ownership that allows citizens to participate in their future success through long-term equity investment.

“The transaction sends a strong message that Zimbabwe is open for business. We look forward to this investment acting as a cornerstone for our introduction to the Victoria Falls Stock Exchange a little later this summer,” he said in a joint statement.

Mr Turney said the consortium was an influential group of individual pension funds in Zimbabwe that collaborate on investments.

He said the 28 consortium members had made the decision to invest in equities and indicated their intention to participate in the Kavango investment facility.

“As part of a rigorous due diligence, several consortium members and members of the investment The committee conducted site visits to review Kavango’s gold projects. It reflects the strong progress our team has made in less than two years of operations in Zimbabwe, that we successfully passed this process.

“We now intend to use the Comarton funds for mine development and construction of our first gold processing plant,” he said.

Mr Turney said Kavango planned to bring Prospects 1, 3 and 4 phases at the Hillside Project into production over the next 12 months, using modern mechanised mining.

Operating through its Zimbabwean subsidiary, Kavango Zimbabwe, established in July 2023, the company is targeting several historically high-grade gold mines in the Matabeleland region, focusing on economic bulk mining.

Mr Richard Muirimi, the group managing director of Comarton Consultants (Private) Limited (Comarton), said the consortium was excited after securing a partner for its fourth investment, the mining sector, having already successfully executed on the targeted property sector, tourism and agriculture sectors.

He said the partnership with Kavango answered the key consortium investment focus of bedding the actual asset in hard currency, benefiting from potential capital growth and generation of long-term hard currency free cash flows, and contributing to the development of sustainable businesses that create employment and other benefits for Zimbabwean citizens.

“With a firm focus on ensuring all four quadrants generate hard currency cash flows, this partnership will contribute to the enhancement of the payment of hard currency quarterly in USD pensions on the Comarton portfolio being implemented from 1 January 2025,” he said.

According to the convertible loan note structure, the convertible facility can be drawn down by the company over a twelve-month period in three tranches.

Tranche 1: entails at least US$500 000 payable in US dollars and to be drawn down immediately for mine development in Zimbabwe.

On Tranche 2: US$1,5 million equivalent was paid through conversion of Zimbabwe Gold, the official currency of Zimbabwe, into US dollars at the Bank of England’s exchange rate via the Reserve Bank of Zimbabwe to be drawn down over the next 12 months for the import of mining equipment for Kavango into Zimbabwe.

Finally, tranche 3: US$3 million paid in US dollars will be drawn down over the next 12 months for mine development in Zimbabwe.

All the funds raised through the convertible will be used for mine development in Zimbabwe and the importation of mining equipment into the country.

Kavango is exploring for gold deposits in Zimbabwe that have the potential to be brought into production, and the company is targeting both open-pit and underground opportunities.