Mutapa Gold declares US$35m first dividend

Nelson Gahadza-Senior Business Reporter

Mutapa Gold Resources has declared a maiden dividend of US$35 million for the nine months to December 31, 2025, following a strong financial and operational performance.

The company’s performance was driven by firm international gold prices, improved operational efficiencies and gains from a restructuring programme undertaken by the mining group.

The dividend marks a significant milestone for the Mutapa Investment Fund-owned gold producer and comes as the company prepares to embark on a US$152 million pipeline of expansion projects aimed at nearly doubling gold output over the next few years.

Under the dividend distribution, Mutapa Investment Fund received US$22,5 million, while the balance was distributed among other shareholders, including Datvest US$4,37 million, National Venture Capital Company of Zimbabwe US$2,63 million and the Public Service Commission Pension Fund US$2,45 million.

Other beneficiaries included the Insurance and Pensions Commission (IPEC) and the Deposit Protection Corporation, which each received US$1,75 million.

Speaking after the company’s trading update and dividend declaration event yesterday, Mutapa Gold Resources chief executive Mr Patrick Maseva-Shayawabaya said the payment reflected the group’s strong cash-generating capacity and demonstrated the success of efforts to improve operational performance across its mining operations.

“This dividend relates to the nine months to December 2025, during which we recorded a profit after tax of US$70 million. Cash generation was very strong during the period. Production was solid, gold prices remained favourable and costs were well controlled,” he said.

Mr Shayawabaya said the company produced 2 354 kilogrammes (kg) of gold, equivalent to just under 76 000 ounces, during the nine months.

He noted that achieving the group’s production target of 3 400 kg this year would comfortably push revenue beyond the US$500 million mark, provided gold prices remain supportive.

Although production fell short of the management’s expectations, Mr Maseva-Shayawabaya said the performance was affected by operational challenges at Freda Rebecca and Shamva mines during the first quarter of the year.

“Production was not quite at the level we had anticipated because we experienced poor ore body health at Freda and Shamva during the first quarter.

“Fortunately, our teams worked through those challenges and, by the latter part of the year, the issues had largely been resolved,” he said.

For the period under review, average ore grades stood at 1,33 grams per tonne, compared to 1,47 grams per tonne achieved in the quarter ended March 2026, reflecting the impact of weaker grades recorded earlier in the year.

Mr Shayawabaya said the operational turnaround has since translated into stronger production performance.

The company produced 901 kg of gold in the quarter ended March 2026, averaging about 300 kg per month, in line with management targets.

“The improvement is being supported by higher head grades and efficiency gains in our processing plants,” he said.

He added that the company has invested in new leach tanks at Freda Rebecca and Jena mines, improving gold recovery rates and enhancing production.

Mr Shayawabaya said the company is pursuing an ambitious growth strategy anchored on the development of the Shamva Hill project and expansion initiatives at Jena Mine.

The  Shamva Hill project entails establishing a two-million-tonne-per-year open-pit mine and a processing plant of similar capacity.

Once completed, the project is expected to increase Shamva Mine’s output from the current 66 kg per month to about 200 kg per month.

The project will also free up processing capacity at Freda Rebecca Mine, enabling production to rise from around 200 kg per month to approximately 270 kg.

Combined with planned expansion at Jena Mine, group production is projected to increase from the current 300 kg per month to about 570 kg per month by 2028.

“The projection to 2028 and beyond is premised on implementing the Shamva Hill project and expanding our processing capabilities. These projects will significantly increase our production profile and position Mutapa Gold Resources for sustained growth,” he said.

On project financing, Mr Shayawabaya said the company has secured US$75 million in funding commitments from local financial institutions, including CBZ, Ecobank, CABS and NMB Bank.

“We initially approached the market seeking US$75 million. A consortium of four banks came together and raised the amount, and we are now close to finalising the agreement,” he said.

“Since then, other banks have indicated interest in participating, meaning we could ultimately raise as much as US$100 million from local financial institutions.”

Commenting on the trading update, Mutapa Investment Fund chief executive Dr John Mangudya attributed the strong performance to the restructuring initiatives undertaken across the group.

He said dividends generated from the gold business would be reinvested to capitalise and strengthen other state-owned assets within the fund’s mining, energy and commercial portfolios.