The Zimbabwe Stock Exchange (ZSE) is moving to make it easier for junior mining and exploration companies to raise equity capital, as the mining sector faces a US$10 billion funding requirement over the next five years, Mining Zimbabwe can report.
By Ryan Chigoche
The push targets one of the industry’s most difficult funding gaps: exploration. Companies at that stage typically have limited or no operating cash flow and carry significant geological risk, making them less attractive to conventional lenders and forcing them to rely heavily on equity and private investors.
The financing constraint extends across the broader industry. The Chamber of Mines of Zimbabwe estimates that the mining sector needs about US$10 billion over the next five years to sustain operations, expand existing mines and develop new projects, while companies have faced difficulties accessing offshore funding and have increasingly relied on internally generated resources and retained earnings.
Against that backdrop, the ZSE is seeking to widen the pool of capital available to smaller mining companies that may not yet have the scale or financial profile required by conventional public-market structures.
Speaking at a mining investment panel discussion, Robert Mubaiwa, Head of VFEX Markets, said the exchange had deliberately designed its approach around the financing needs of smaller exploration companies.
“We’ve made a deliberate effort to design boards that we think are going to help in terms of making sure exploration companies are able to take advantage. What we can do is tailor what we think should be workable within our own setup. If you have a 20, 30-acre block, how can you finance it to the next level? We looked at that and then considered that 100,000 in our market is ideal for people to start coming to the market and raise money on the public platform,” Mubaiwa said.
The US$100,000 figure represents the level Mubaiwa said the exchange considers appropriate for smaller projects seeking to begin raising capital through the public market, rather than a formal minimum confirmed in the transcript.
The ZSE has also developed Venture and Exploration market structures intended to give smaller companies a route to raise equity as they move from exploration toward development.
In shaping the framework, Mubaiwa said the exchange had studied established mining markets such as Canada’s Toronto Stock Exchange and Australia’s Australian Securities Exchange, while adapting their models to Zimbabwe’s market.
That distinction matters because exploration companies need capital before they have a producing asset to generate cash flow. Equity therefore becomes a more viable funding route than debt, with investors taking on the geological and development risk in return for potential exposure to future discoveries.
For Zimbabwe, expanding that pool of risk capital could help address a bottleneck in the pipeline of future mines, particularly as the country seeks to increase mineral production and attract billions of dollars in new investment.
But making capital available is only one side of the equation. For investors to put money into early-stage projects, they also need confidence in the quality of the information being presented to them.
That is where the ZSE’s proposed private platform comes in. Mubaiwa said the exchange was developing a mechanism through which exploration companies could present project information to prospective investors and enter bilateral funding discussions.
The model would involve assessing and verifying project information before investors commit capital. Mubaiwa said the exchange had held discussions with relevant institutions on developing a framework to verify mining claims and other project information.
The emphasis on verification is aimed at reducing the information gap between junior miners seeking funding and investors assessing projects where commercial viability may not yet be established.
“What is key for us to be able to be successful and then translate that information and attract more investment into the sector is to give credible information where potential investors are in a position to look at the information and get confidence that this is credible information. Therefore, I need to be able to lead an investment into that. Disclosures are very key,” Mubaiwa said.
The private platform would give projects that are not yet ready for a public listing another route to investors, while potentially creating a pipeline of companies that could later graduate to the public market.
The exchange is also looking beyond listings to broaden the financing options available to mining companies, including initial public offerings and follow-on equity issues.
Mubaiwa said a new Financial Services Centre would further expand the funding ecosystem by allowing professionals with expertise in mining project fundraising to establish funds and mobilise capital for projects.
Taken together, the initiatives are aimed at connecting Zimbabwe’s junior mining sector with a wider pool of risk capital at a time when traditional financing remains constrained.
For exploration companies, the changes could provide an additional funding route between private investment and conventional bank finance. For the exchange, bringing more of these projects into the formal capital market could also help deepen Zimbabwe’s mining investment base and create a pipeline of future listings.
