• Karo Mining cut its FY2025 consolidated loss to US$2.17m from US$2.50m in FY2025
• A rebound in the PGM basket price to circa US$1,882/oz in 2025 improved project economics, stabilised construction momentum and lifted confidence around debt capacity
• Despite improving market conditions, Karo remains pre-revenue and cash-consumptive, with heavy reliance on shareholder support and external funding until financial close is achieved

Harare- Karo Mining Holdings Plc, the Victoria Falls Stock Exchange (VFEX)-listed mining investment company developing the Karo Platinum Project in Zimbabwe, narrowed its annual loss in the year ended 30 September 2025, signalling early stabilisation after several years of weak platinum prices, funding delays and a prolonged construction timeline.

The group reported a consolidated loss of US$2.17 million for the period, a 13% improvement from the US$2.50 million loss recorded in the prior year, according to its latest full-year results.

While the company remains pre-revenue and firmly in a capital-intensive development phase, the reduced loss reflects improving commodity market conditions, stronger finance income and renewed momentum at a project that had slowed during the global downturn in platinum group metals.

Karo is an investment holding company incorporated in Cyprus. Its principal asset is an 85% interest in the Karo Platinum Project, a large-scale platinum group metals development located on the Great Dyke, one of the world’s most significant platinum-bearing geological formations.

The remaining 15% is held by the Government of Zimbabwe through Generation Minerals on a free-carry basis, following amendments to the original Investment Framework Agreement signed with the state.

By 2024, the average PGM basket price had fallen to around US$1,302 per six-element ounce. The weaker pricing environment tightened project economics, delayed financial close and forced management to moderate construction activity while funding negotiations continued. The impact of these conditions is reflected in Karo’s financial statements, which show elevated development costs alongside persistent operating losses during the period.

Market conditions began to improve decisively in 2025. Platinum prices recovered strongly, lifting the average basket price by about 45% to US$1,882 per ounce. The rebound was underpinned by tighter supply conditions, improving industrial demand, renewed investor interest in precious metals and ongoing production challenges in South Africa, the world’s largest platinum producer. The stronger pricing environment materially improved the estimated fundability and debt capacity of the Karo project, allowing construction momentum to stabilise.

This shift is visible in the company’s full-year results. While Karo remains loss-making, finance income rose sharply to US$815,000 from US$329,000 in the prior year, largely reflecting interest earned on funds advanced to the project. This increase helped offset higher operating expenses associated with continued development activity and contributed to the narrowing of the overall loss.

At the same time, the scale of investment continued to expand. Property, plant and equipment rose to US$174.2 million as at 30 September 2025, up from US$140.9 million a year earlier, driven primarily by capitalised mine development costs. These figures underscore the capital-intensive nature of the project and the progress made on site despite earlier delays.

The origins of the Karo Platinum Project stretch back to the mid-2010s, with formal corporate structuring taking shape after Karo Mining Holdings was incorporated in March 2018. That same year, the company entered into an Investment Framework Agreement with the Government of Zimbabwe, positioning the project as a strategic anchor for the country’s ambition to expand platinum output and develop downstream processing capacity. An addendum to the agreement signed in March 2022 reduced Karo’s ownership to 85% and formalised the state’s free-carry interest.

From the outset, the project was conceived as a fully integrated operation. Once completed, Karo Platinum is expected to encompass underground mining, concentrators, smelting and refining facilities, supported by associated infrastructure including power generation and water supply. The capital and working capital required to reach first ore in the mill has been estimated at US$499 million, placing the project among the largest single mining investments undertaken in Zimbabwe in recent decades.

After years of feasibility work, permitting and funding preparations, physical construction at the Karo site officially commenced in  2022. However, progress slowed materially during 2023 and 2024 as the global platinum group metals market entered a pronounced downturn.

Platinum, palladium and rhodium prices came under sustained pressure as global automotive production softened, electric vehicle adoption clouded long-term auto catalyst demand, substitution reduced palladium loadings and investor appetite for precious metals weakened.

The heavy investment phase weighed on liquidity. Cash and cash equivalents declined to US$5.6 million from US$12.4 million, reflecting significant cash outflows related to construction. Net cash used in investing activities amounted to nearly US$80 million during the year, highlighting the group’s ongoing reliance on shareholder support and external funding to sustain development.

Funding has been anchored by strong backing from majority shareholder Tharisa Plc. Total borrowings stood at approximately US$38 million at year-end, largely comprising VFEX-listed bonds guaranteed by Tharisa and related-party facilities.

The bonds, originally due to mature in November 2025, were extended by a further three years to December 2028 following bondholder approval, although the coupon was increased to 11%, reflecting tighter global credit conditions and the project’s development risk profile.

Looking beyond the balance sheet, the broader PGM market backdrop has become more supportive. Platinum demand is increasingly diversified, with growth in industrial applications, hydrogen and fuel-cell technologies and jewellery consumption partially offsetting longer-term concerns around internal combustion engine demand. Supply constraints, particularly in South Africa, continue to provide underlying price support, while palladium and rhodium markets have shown signs of stabilisation after extreme volatility.

Against this backdrop, the outlook for 2026 is one of cautious optimism. While macroeconomic uncertainty and global growth risks remain, platinum prices are likely to remain firmer than the 2023–2024 trough, providing a more stable foundation for capital-intensive projects. For Karo Mining, management is targeting financial close in 2026, which would unlock the next phase of construction and keep first ore in the mill on track for around mid-2027.

The narrowing of losses in the year ended 30 September 2025 does not yet mark a turnaround, but it does suggest that the most severe phase of the downcycle may be behind the project. After years of delays driven by weak prices and funding constraints, Karo Platinum is once again advancing in a more favourable market environment.

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