Staff writer
Southern Africa focussed mine development and metals exploration company, Kavango Resources says it has issued a US$5million convertible loan note facility to a consortium of Zimbabwe registered pension funds, Insurance- 24 reports.
The Convertible is interest free can be drawn down in three tranches by Kavango and is convertible into new ordinary shares in Kavango at a conversion price of the USD equivalent of 1p per share.
In a press statement, the firm said it intended to ensure that the Conversion Shares issued under the Convertible will be issued to the Victoria Falls Stock Exchange as part of the Company’s planned referral listing.
It said a further update will follow concerning the VFEX referral listing.
“We are delighted to have secured this US$5million investment facility from the Comarton Managed Pension Funds Investments Consortium. A key driver of our strategy in Zimbabwe is to promote local shareholder ownership. The country’s goldfields are incredibly rich, and it is important that citizens are offered the opportunity to participate in their future success, through long-term equity investment.
Today’s announcement 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.
The Consortium is an influential group of individual pension funds in Zimbabwe that collaborates on investments. Twenty-eight consortium members have the mandate to invest in equities and have indicated their intention to participate in the Kavango investment facility,” Kavango Resources Chief executive, Ben Turney said.
Turney said as part of a rigorous due diligence, several consortium members and members of the investment committee conducted site visits to review the Kavango’s gold projects.
He added that this reflected the strong progress Kavango team had made, in less than two years of operations in Zimbabwe, that it successfully passed this process.
“We now intend to use the Comarton funds for mine development and construction of our first gold processing plant. Kavango currently aims to bring Prospects 1, 3 and 4 at the Hillside Project into production over the next 12 months, using modern mechanised mining.
“The Consortium’s backing of Kavango is a powerful endorsement of the Company’s business model and we look forward to building on this relationship in the coming years,” he said.
Comarton Consultants Group Managing Director Richard Muirimi said the Consortium was excited at having secured a partner to walk with in their fourth investment quadrant: the mining sector, having already successfully executed on the: targeted Property sector, Tourism and Agriculture sectors.
He said this partnership with Kavango answered to the key Consortium investment focus of bedding the actual asset in hard currency, benefiting from potential capital growth, 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 the four quadrants generate hard currency cash flows, this partnership will contribute to the enhancement of the payment of hard currency quarterly USD pensions on the Comarton portfolio being implemented from 1 January 2025.
“We have found Kavango: a professional entity, accommodative to the local realities, adaptive and sensitive to local traditions/practices as to set a firm foundation for collaborative partnership for the benefit of; members of our pension funds, all shareholders and Zimbabwe at large.”Muirimi said.
At least US$500,000, is expected to be drawn down immediately for mine development in Zimbabwe while US$1,500,000 equivalent paid through conversion of Zimbabwe Gold, the official currency of Zimbabwe (“ZWG”), into US Dollars at the Bank of England’s exchange rate via the Reserve Bank of Zimbabwe is to be drawn down over the next 12 months for the import of mining equipment for Kavango into Zimbabwe.
US$3,000,000, paid in US Dollars is expected to be drawn down over the next 12 months for mine development in Zimbabwe.
All funds raised through the Convertible ate expected to be used for mine development in Zimbabwe and for the import of mining equipment into Zimbabwe.
“All Conversion Shares will be issued at a price of 1p per share, with the USD/GBP exchange rate calculated on the mid spot price as quoted by the Bank of England at 1630GMT/BST, on the working day of receipt of a conversion notice (or next working day if received after 1630GMT/BST).
Conversion of the Convertible into the Conversion Shares is automatic on satisfaction, or waiver by the Company, of certain conditions precedent, including the planned VFEX referral listing.
Conversion Shares will be issued directly to participating Consortium members on a pro-rata basis and admitted to trading on the VFEX, once the Company has secured its referral listing. A separate announcement on Kavango’s planned referral listing on the VFEX will be issued shortly, the firm said.
Kavango is exploring for gold deposits in Zimbabwe that have the potential to be brought into production by the Company quickly through modern mechanised mining.
The Company is targeting both open-pit and underground opportunities.
