Business mogul takes Zim gold mines to Nasdaq

Hennessy Capital Investment Corporation (HCVI), a special purpose acquisition firm listed on the Nasdaq (Stock Exchange in USA), has struck a definitive business combination deal with Mzee Khumalo’s Metallon Corporation to invest in gold mines in Zimbabwe.

Under the agreement, the two sides have agreed to form a new combined entity, Namib Minerals, which will be publicly traded on the Nasdaq and raise capital to support growth plans at How Mine and restarting Redwing and Mazowe Mines, a joint statement by the two companies said.

Namib reportedly assumed control of the mines in February 2024, following Metallon’s closure in the UK.

The merger is expected to provide Namib with US$91 million in net proceeds and an additional US$60 million in funding.

The company has been valued at US$500 million, with the potential to earn more based on restarting Mazowe and Redwing.

Currently, Namib Minerals’ How Mine is the only operational site with organised mining activities.

The mine, a high-grade, underground gold mine located near Bulawayo, boasts a distinguished production history and consistently ranks among the lowest cost producers in its category, according to Namib.

It generates steady cash flow and maintains a strong operational record of staying within budget.

Established underground resources hold promise for extending the mine’s productive life.

At Mazowe and Redwing mines, operations are primarily artisanal, largely relying on rudimentary methods by illegal miners.

While some former Mazowe Mine managers have sought corporate rescue, a Zimbabwean bankruptcy protection process, the company contends they are no longer employees.

The combined value of the merged company would be estimated at US$609 million while the current Namib Minerals shareholders will own about 71 percent of the new public company.

“Namib has an identified pathway to operate as a multi-asset producer in Africa, with growth plans underway to restart the company’s previously producing Mazowe and Redwing gold mines, along with development potential in the Democratic Republic of the Congo to unlock battery metals in the region,” read part of the statement.

Namib Minerals has already begun exploring their future in the Democratic Republic of Congo (DRC) with work underway across 13 granted exploration permits.

Initial drilling at six locations has identified promising signs of copper and cobalt, essential battery metals for the modern world.

The current management, led by chief executive, Ibrahima Tall, will remain in place after the merger.
“This business combination with HCVI will enable us to continue growing our business while helping us to realise the full potential of our mining asset portfolio,” said Tall.

“Namib is committed to creating an environment of safe, sustainable and profitable mining operations that supports the local communities we serve.

“This transaction provides us a partner in HCVI that shares our focus on sustainable growth and our goal to return as a multi-asset producer in Africa.”

HCVI chairman and chief executive officer, Daniel Hennessy, said the company’s initial goal was to merge with a leader in the industrial or energy-transition sector. He said Namib Minerals emerged as the “compelling partner” due to its established underground precious metals mining expertise, potential for growth, and commitment to safe, sustainable and community-beneficial operations.

“HCVI was formed with the objectives of merging with an established and competitive company operating in the industrial or energy-transition sector,” said Hennesy.

“Namib stood out as a compelling partner due to its history of underground mining in precious metals, opportunities for future expansion and its mission to create safe, sustainable and profitable operations in the communities it serves.”

The completion of the proposed business combination is expected by the fourth quarter of 2024, but remains subject to conditions precedent, including regulatory and shareholder approvals.-ebusinessweekly