(CNN) A deployment of Russian guns-for-hire, with links to the Kremlin, has sustained casualties in its fight against Islamist militants in Mozambique, multiple sources have told CNN.

In another example of Russia's growing reach into Africa , dozens of private military contractors are aiding the Mozambique army which is battling an insurgency in its northernmost province.

The mercenaries in this resource-rich southern African country appear associated with Yevgeny Prigozhin , a St. Petersburg oligarch so close to the Kremlin that he is known as President Vladimir Putin's "chef."

Prigozhin, whose reach in the region stretches into Sudan, Libya and the Central African Republic, is thought to be the financier of the Wagner group, hundreds of whose fighters have also been deployed into Syria. His companies have been previously sanctioned by the US Treasury Department for their actions in Syria and his financing of the Internet Research Agency, which was responsible for Russian attempts to interfere in the 2016 US elections.

Prigozhin has routinely denied any connection to Wagner.

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The fast-expanding insurgency in Mozambique threatens to disrupt crucial foreign investment in the country's natural gas reserves, believed to be worth billions of dollars.

Multiple sources have told CNN that the Russian intervention has not begun well. Two contractors, ages 28 and 31, have been killed during clashes with the insurgents, the sources say. And there are unconfirmed reports of additional casualties.

Yevgeny Shabayev, who acts as an unofficial spokesman for Wagner fighters, told CNN that the bodies of the two men had already been returned from Mozambique to their home region of Vladimir, east of Moscow.

The role the mercenaries are playing in the country -- combat or advisory -- is still unclear. CNN has obtained photographs showing Russian fighters and equipment in the port city of Pemba. Mozambican sources told CNN the mercenaries are also based further north in the coastal town of Mocimboa da Praia and have been involved in several operations along the northern border with Tanzania, where the Islamist insurgency is growing in strength.

Sources in the country also told CNN that the Russians are poorly equipped for combat in the dense bush and that the relationship between the mercenaries and Mozambique army is strained.

One Mozambican soldier told a producer working with CNN that the Russians "are doing nothing in terms of reducing the impact of the attacks" and that Mozambican troops had refused to take part in some operations.

Dmitry Peskov, Russian President Vladimir Putin's spokesman, told reporters in early October that "as far as Mozambique is concerned, there are no Russian soldiers there."

The deployment of Russian contractors in September followed a visit by President Filipe Nyusi in Moscow a month earlier, the first visit by a Mozambican head of state in two decades.

During the visit, Presidents Putin and Nyusi signed agreements on mineral resources, energy, defense and security.

Russian President Vladimir Putin and Mozambique's President Filipe Nyusi meet at the Kremlin in August.

Shortly after the trip, 160 guns-for-hire arrived in Mozambique, according to an eyewitness. They arrived on September 13 in a giant Russian Antonov An-124 plane, according to flight data.

Twelve days later, a second Antonov An-124 touched down at Nacala Airport carrying military equipment, including an Mi-17 attack helicopter.

This image, shared widely on social media and verified by a CNN source, appears to show a truck being unloaded in Nacala in September.

At least one of the An-124s that flew into Mozambique belonged to the 224th Flight Unit of the Russian air force. The Russian Defense Ministry previously signed a contract, details of which were seen by CNN, with a Prigozhin company for the use of transport aircraft of a similar air force unit, the 223rd Flight. Between August 2018 and February 2019, two planes of the 223rd Flight made at least nine flights to Khartoum, as Russia carried out an ultimately unsuccessful plan to keep deposed Sudanese President Omar al-Bashir in power.

Russia sees big opportunities across Africa as the US military presence there is scaled back and as cash-strapped governments seek security assistance. Moscow has signed more than 20 defense agreements with African governments, and last month Putin welcomed 43 heads of state or government from Africa to a summit in the Black Sea resort of Sochi.

In return, the Kremlin gains strategic influence and preferential access to the continent's vast natural wealth, from gas to gold.

This image, shared widely on social media and verified by a CNN source, appears to show an Mi-17 transport helicopter, part of the military hardware delivery at Nacala in September.

CNN's investigation in the Central African Republic earlier this year showed that one of Prigozhin's companies, Lobaye Invest, was granted several concessions to mine for diamonds and gold.

There is now plentiful evidence, if no public confirmation, that Mozambique has become the latest African theater for Prigozhin.

And as elsewhere in Africa, companies linked to Prigozhin have carried out well-disguised social media campaigns in Mozambique.

Social media shutdowns

Last month, Facebook closed networks of accounts that were actively targeting a total of eight African countries. It said that: "Although the people behind these networks attempted to conceal their identities and coordination, our investigation connected these campaigns to entities associated with Russian financier Yevgeniy Prigozhin."

In Mozambique, one was called Onda da Frelimo and was set up to support President Nyusi ahead of his victory in elections in Mozambique last month.

It highlighted a "poll" (the publication of which is illegal in Mozambique during campaigning) purportedly carried out by another entity affiliated with Prigozhin -- the International Anticrisis Center -- which predicted a sweeping win for Nyusi.

Yevgeny Prigozhin is so close to the Kremlin that he is known as President Vladimir Putin's "chef."

According to the Stanford Internet Observatory which examined Russian social media activity in Africa, Onda da Frelimo was one of four Facebook accounts set up on the same day -- September 23. Another promoted government successes against the insurgents; a third criticized an opposition presidential candidate.

Also active in Mozambique is a group called AFRIC, which is linked to Prigozhin according to the Dossier Center, an investigative group in London run by exiled Russian businessman Mikhail Khodorkovsky. AFRIC is led by a Mozambican, Jose Matemulane, who lived in St. Petersburg for several years. It denies any connection to Prigozhin. Matemulane told the New York Times last month that AFRIC was launched last year with support from a St. Petersburg businessman he declined to name.

AFRIC, a self-described NGO, conducts a number of activities including election monitoring; it only receives donations in crypto-currency and was involved in the pre-election poll.

AFRIC's Facebook page was suspended at the end of October. Facebook said AFRIC was associated with Prigozhin and had attempted to interfere in the domestic politics of African countries.

A growing threat

Mozambique's huge unexploited resources, especially liquified natural gas (LNG) and precious minerals, such as gold, diamonds and rubies, have made it an attractive target for outside investment.

Russian energy giant Rosneft is competing with other international companies for a slice of what could become one of the world's largest sources of LNG. In August, it signed an agreement with Mozambique's state-owned energy company to help develop gas fields in the region.

Additionally, Russian diamond giant Alrosa is carrying out geological surveys in Mozambique.

But pacifying northern Mozambique may be beyond a few dozen Russian mercenaries and a poorly-trained and equipped Mozambican army that's largely relying on artillery. The insurgents are already threatening energy infrastructure being built near the border with Tanzania. There have been at least two attacks on vehicles carrying oil workers in recent months.

The insurgency has intensified over the last two years as hundreds of young Muslim men have become radicalized and joined a group called Ahlu Sunna wa Jama.

Counterterrorism analysts are concerned that ISIS may be grafting itself onto the insurgency in northern Mozambique. It has claimed several attacks since June, claims that have not been verified by CNN. Last month, ISIS's online magazine Naba claimed that "multiple soldiers from the Mozambican and Russian armies mounted a joint attack on positions of the mujahideen in Cabo Delgado, where the mujahideen clashed with them with a variety of weapons."

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In early November, ISIS claimed its "Central African Province" had killed eight Mozambican soldiers. That was followed by reports of a clash on the border with Tanzania, close to international infrastructure being developed for exporting LNG supplies.

Just how far ISIS is really connected to the insurgency is unclear. Emilia Columbo, a senior associate for the Africa Program at the Center for Strategic and International Studies in Washington, is skeptical about links between local militants and ISIS. "This conflict still seems to be very local in nature, stemming from a dispute between radicalized youth and their religious elders over what is true Islam," she told CNN.

"They set up their own mosques and schools, prompting the established religious leaders to call on the government to take action against these upstarts," Columbo said. While established religious leaders benefited from government largesse, local youth are not.

Competing with Prigozhin

The Russians were not without competition in offering security assistance to Mozambique. Sources in the military contractor business told CNN that at least three firms made a bid for a role in combating the insurgency.

One was a little-known South African company called Umbra Aviation, which recommended the use of attack aircraft and helicopters as well as a range of armored vehicles, in what it described as "a proposal for the effective defeat/destruction of the hostile/anti-government components."

Umbra's proposal, obtained by CNN, concluded: "We will need to ensure that the operation is conducted as covertly as possible, with all successes and recognition going to the Mozambican Military."

Another company that bid was OAM, run by John Gartner. Gartner told CNN that his plan had emphasized "the need for a long term engagement with Mozambique Army through a training and advisory assistance role," to be followed by embedding advisers with the local military.

Gartner says the deal with the Russians was no surprise. "The Russians gain another foothold in Africa, on the eastern seaboard, while the Mozambique government receives military support for a minimal cost -- though there may be longer term political costs based on the bad publicity attached to Wagner."

The Russian contingent now in Mozambique may find themselves in for a prolonged struggle. Columbo says the insurgency is growing more capable and that "the security services' response to the insurgents seems to go from a total failure to act, to over-reacting to the point of violating human rights." President Nyusi earlier this year described the insurgents as "faceless evil-doers" who "sow terror, kill, destroy and plunder the goods of defenseless populations."

Columbo told CNN that Mozambican security forces are not trained in counter-extremist operations and lack the discipline, equipment, and military intelligence to combat the insurgency. But without a more comprehensive approach to dealing with economic and social problems in northern Mozambique, she believes the insurgency will become an entrenched and long-term security problem.

Gartner sees a similar risk. "While not a strategic threat at this stage, these insurgencies tend to gain momentum as central government cracks down, deploying poorly trained troops who do not come from the communities in which they are deployed, thereby creating an oppressive environment."

But he believes the Russians are also in it for the long haul. "Reports that they have recently withdrawn from the immediate area of operations are probably accurate, but this is not to say that Wagner will abandon their mission," he told CNN. "They will regroup and reassess their tactics and strategies before redeploying. Failure is really not an option."