Peel Hunt sees Tharisa's Karo Platinum Project moving closer to financing following the signing of a binding five-year concentrate purchase agreement with a subsidiary of Valterra Platinum.
The broker said the offtake agreement, which follows the recent Special Mining Lease Agreement with the Zimbabwean government, could help unlock the financing package for Karo.
Under the agreement, Karo Platinum will supply platinum group metals (PGM) and base metal concentrate to Valterra for an initial five-year term.
Peel Hunt said work at the project site was well advanced, with the initial open pit being stripped back, plant construction continuing and installation of flotation cells underway. Water dam works were also making good progress compared with the broker's previous site visit.
The broker estimates that once operational, Karo could add around US$250 million to group EBITDA, reflecting the shallow, open-pit nature of the orebody.
That potential EBITDA contribution compares with Tharisa's five-year trailing average EBITDA of around US$180 million, highlighting the potential scale of the project relative to existing operations.
Peel Hunt currently forecasts first output from Karo in financial year 2028, although it said this could prove conservative given the pace of work currently being undertaken at site.
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Peel Hunt's assessment puts the strategic importance of the offtake agreement into sharper focus. With the mining lease secured, a downstream partner now in place and construction progressing, Karo is moving from a long-term development story towards a funded production project. If Peel Hunt's US$250 million EBITDA estimate is achieved, Karo could materially change the scale of Tharisa's earnings base.