Padenga bets big on gold
…..Dallaglio takeover signals bold shift amid soaring prices

CLOUDINE MATOLA
Padenga Holdings Limited (PHL) has taken a bold step by securing full ownership of its mining subsidiary, Dallaglio, in a strategic move that is expected to significantly boost its earnings.
This acquisition comes at a time when gold prices are surging to record highs, making it a lucrative opportunity for the company.
The Victoria Falls Stock Exchange (VFEX) recently gave Padenga the green light to issue new ordinary shares to facilitate the takeover. With this approval, Padenga has effectively cemented its transition from a crocodile skin exporter to a major player in Zimbabwe’s gold mining sector.
Padenga has long been known for its dominance in the crocodile skin business, supplying premium hides to international luxury brands.
However, shifting global market trends, increasing activism against exotic animal skins, and economic uncertainties have posed significant challenges to this traditional revenue stream.
Recognizing these challenges, Padenga began diversifying its portfolio in 2019 by acquiring a 50.1% stake in Dallaglio Investments, which owns and operates gold mines in Zimbabwe.
The latest acquisition, which gives Padenga 100% control, signals a full-scale pivot away from reliance on crocodile skins toward a more stable and potentially more profitable industry.
Experts say Padenga’s decision to go all-in on gold is a well-calculated move driven by several factors including that gold as a safe haven asset. Unlike agricultural commodities, which are highly susceptible to climate change, disease outbreaks, and shifting consumer trends, gold remains one of the most reliable assets globally. It tends to perform well during economic downturns, serving as a hedge against inflation and market volatility.
In addition, the global gold market has been experiencing unprecedented highs, fueled by economic uncertainties, geopolitical tensions, and central bank demand.
With prices continuing to surge, Padenga is positioning itself to capitalize on this favorable trend.
- Operational Stability – Agriculture, particularly exotic animal farming, involves a complex supply chain with numerous challenges, from disease management to ethical concerns and regulatory pressures. Mining, while capital-intensive, offers a more straightforward business model with fewer operational risks in the long term.
Investment analyst Enock Rukarwa believes the shift toward gold is a prudent decision, given the complexities of agricultural operations.
“Broadly speaking, increased investment in mining as opposed to agriculture is often a safer and more stable option due to various exogenous and endogenous factors,” Rukarwa told Business Times.
“Given an option to deepen crocodile operations or invest in gold, gold presents stronger fundamentals—especially in terms of its global liquidity, safe-haven status, and broad market acceptance. More so, controlling 100% of an asset instead of 50.1% provides full operational, strategic, and financial decision-making power without potential conflicts.”
However, some analysts warn that Padenga’s growing reliance on gold could expose the company to increased financial risk.
Investment expert Tafara Mtutu argues that while the move may seem beneficial in the short term, it could create long-term vulnerabilities.
“I think, in order for my response to make sense, we need to go back to when Padenga was purely a crocodile skin manufacturer,” Mtutu said.
“At that time, the company relied entirely on one product—crocodile skins. This business was becoming increasingly risky due to changing consumer preferences, growing opposition from animal rights activists, and fluctuations in the global luxury goods market. It made sense to diversify.”
According to Mtutu, entering the gold market was initially a strategic hedge against volatility in the luxury sector. When global economies flourish, luxury goods perform well; when markets contract, gold typically strengthens. This balance helped Padenga mitigate risks.
“But now, with this full takeover of Dallaglio, gold has become the dominant earnings driver. The crocodile skin business has been shrinking in terms of its contribution to overall group earnings, meaning Padenga is effectively becoming a gold mining company rather than a diversified enterprise,” Mtutu noted.
“This move eliminates the earnings stabilization effect that was originally intended when Padenga diversified. Right now, the decision seems sound because gold is trading at record highs. But in the long run, if gold prices fall, the company will be highly exposed. There is no other business segment large enough to cushion potential losses.”
With full ownership of Dallaglio, Padenga is expected to significantly increase its revenues in the short to medium term. Gold mining is already contributing the bulk of the company’s earnings, and full control over Dallaglio will likely boost profitability further.
However, the company is also assuming higher risks. Mining is a capital-intensive industry that requires significant investment in exploration, equipment, and operational expansion. Additionally, gold prices are notoriously volatile. A decline in prices could erode profitability, especially now that Padenga has limited alternative revenue streams.
Despite these risks, Padenga’s strategic shift aligns with broader trends in Zimbabwe’s economy, where mining has become a key driver of growth. Zimbabwe has some of the largest gold reserves in Africa, and the government has been actively promoting investment in the sector.
Now that the company has fully acquired Dallaglio, the next step will be optimizing mining operations to maximize efficiency and profitability.
Padenga’s acquisition of full ownership in Dallaglio marks a significant milestone in its transformation from an agricultural enterprise into a mining giant. The timing of this move, amid record-high gold prices, presents substantial short-term benefits.
However, the long-term sustainability of this decision will depend on gold market dynamics, effective risk management, and strategic business decisions. While the company has positioned itself well for immediate gains, its future success hinges on how well it navigates the challenges of an industry known for its cyclical nature.
For now, Padenga’s bet on gold appears to be paying off—but only time will tell whether this strategic shift secures lasting prosperity or exposes the company to greater financial volatility.