Weeks after Zimbabwe’s independence in 1980, British mining tycoon Algy Cluff hopped on a plane to Harare, keen to invest in the new economy. Soon after, his company Cluff Resources opened Freda Rebecca, which became the country’s biggest gold mine.
Cluff Resources, in 1996, then sold the mine to Ashanti Goldfields, marking Cluff’s exit from Zimbabwe. A quarter of a century later, Cluff is back.
This time, it is through an investment in Invictus Energy’s gas prospect in Muzarabani. His Cluff Energy Africa has agreed to fund 33.33% of the costs of a two-well exploration campaign, in exchange for a potential 25% in the project.
Invictus MD Scott Macmillan said Cluff Energy Africa “is a like-minded partner and a close cultural fit, and their team has an outstanding track record of making and monetising discoveries in Africa”.
Invictus believes there may be up to 8.2 trillion cubic feet of gas in the Muzarabani prospect. To confirm this, the company will need to drill exploration wells. Canada’s Polaris has recently completed a seismic survey in the area, an exercise meant to mark the best places to drill the wells. The farm-in deal with Cluff Energy Africa is key in raising funding for that.
Invictus has picked Exalo Drilling, a unit of one of Europe’s biggest LNG companies PGNiG Group, to start the drilling campaign in May next year.
Cluff Energy Africa is putting together a portfolio of oil and gas assets in Africa. Last year, it was awarded 15 offshore blocks in Sierra Leone. Cluff plans to raise capital in early 2022.
Cluff, who has been in energy since the 1970s, owns 60% of Cluff Energy Africa. The remaining 40% is owned by Mike Spencer, the billionaire who owns London-based investment firm IPGL. Spencer, who sits in the House of Lords, turned to angel investing after selling his company, NEX, for US$5.4 billion in 2018.
Cluff said Muzarabani was a “rare high quality but low-cost opportunity that has world class scale. We believe it will form a key pillar in the portfolio of assets that we are currently assembling.”
He pointed to his previous investments in Zimbabwe, saying: “I am also excited to be bringing the Cluff group back to Zimbabwe having enjoyed previous success in the resources sector in the country with the discovery and development of the largest gold mine in the country at Freda Rebecca.”
Under the terms of the deal, Cluff must exercise its option by the end of March 2022 to enter a binding farm-in deal and joint operating agreement. The company must also put up the funding to meet its farm-in commitments.
Invictus in July abandoned previous talks to secure a partner after failing to complete due diligence work, partly due to the COVID-19 restrictions.-NewZWire