Modern Mining July 2023

Exchange (ZSE) to operate in the Victoria Falls special economic zone. The bourse incentivises listings with the prospect of raising capital in hard cur rency. These incentives include that:  All the cash inflows raised on VFEX are considered free funds and can be kept in FCA Investments Foreign currency accounts.  There is allowance to use offshore settlement for trades conducted on the VFEX.  VFEX also offers tax incentives for shareholders and exemption from capital gains and withholding tax for the bourse investors.  VFEX has provided an avenue for international investors into Zimbabwe without the associated currency risk. The success of the bourse is undeni able, with an over 400% increase in market value in the last year, with it currently sitting at US$1.4 billion. The value of stocks traded during the first quarter of this year amounted to more than US$13 million. VFEX has created a procedure for list ing specifically applicable to junior mining companies. A junior mining company is a company whose principal activity is that of mining. However, it does not qualify to list on the main board, though it does qualify to list on the junior board. The criteria for the listing of junior min ing companies prescribes that they must have:  A subscribed capital of US$250 000.

Caledonia Mining’s smelter operations in Zimbabwe.

in part to fund a 12 MW solar PV plant that became operational in November 2022 to reduce on-mine costs. Tharisa Minerals’ (Tharisa) successful listing in December of just over US$30 million in 3-year bonds is another example of the immense fund-raising potential of the VFEX for mining operations. The funds raised on the VFEX by Tharisa will be critical in enabling Tharisa to finance the proposed US$391 million Karo Platinum project in Zimbabwe. Another Zimbabwean miner that is listed on the VFEX is Bindura Nickel Corporation, which listed on 17 December 2021. The funding potential of the VFEX model has been successfully demonstrated through the Caledonia listing and subsequent fund raising as well as the Karo Platinum project listing, for exam ple. Listing on the VFEX in addition to other funding strategies could be the answer to funding mining projects in what has historically been a difficult cash environment. Couple that with an unprecedented commodities price cycle, and there may be a pathway to finding the capital needed to build a suc cessful mining project in Zimbabwe. 

Bindura Nickel project in Zimbabwe.

 Not less than 5 million equity shares in issue.  A satisfactory profit history for the preceding three financial years, if applicable.  At least 20% of each class of equity shares must be held by public shareholders, unless otherwise agreed with the VFEX.  The number of public shareholders of listed securi ties must be at least— (i) 50 in respect of equity shares; (ii) 25 in respect of preference shares; (iii) 10 in respect of debentures.  Minimum spread criteria should be complied with on a continuous basis. Tharisa and Caledonia’s VFEX listing The listing of Caledonia Mining Corporation (Caledonia) in 2021, demonstrated the funding potential of the VFEX. Caledonia received incred ible support from Zimbabwean investors who oversubscribed by more than 50% for the Caledonia Depository Receipts. Caledonia ended up raising US$7.8 million, much more than the originally tar geted US$3 million. The capital raised was used

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