South Africa’s resource exploration firm, Tharisa Mine has confirmed its acquisition of all the shares in Zimbabwe’s Salene Chrome, in a transaction valued at US$3 million.
The transaction is in line with Tharisa’s growth strategy, including geographic diversification, operating low cost and open pit operations with access to a premium chrome product, replicating the Tharisa model in a different jurisdiction, and maximising the group’s value at a low entry cost, a short development time-line and limited capital requirements.
Salene Chrome was awarded a number of special grants in May 2018 on the eastern side of the Great Dyke allowing for the mining of various minerals and subsequently applied for, and was granted a number of licenses to the western side of the dyke.
The Great Dyke contains the world’s largest known platinum group metals and high-grade chrome deposits outside of South Africa.
The eastern mine and Salene Chrome West cover a total of 24,300 hectares to the of the Great Dyke. Located in a Special Economic Zone, the Salene Chrome project affords the import and export of capital without trade barriers.
Beyond the expatriation of capital, other benefits include a reduced tax rate, duty-free importation of raw materials and exchange control facilities.
Tharisa’s initial exploration programme amounted to US$2 million. However, based on the outcomes of the exploration and metallurgical test work, an internal discounted cash flow model produced a net present value for the eastern mine at US$ 6.9 million premised on a life of open pit of seven years.