REG - Kazera Global PLC - Favourable Walviskop Mining Permit Decision

Kazera GlobalAnnouncement

28/07/2022 07:00

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RNS Number : 9926T  Kazera Global PLC  28 July 2022

Kazera Global plc

("Kazera" or the "Company")

Favourable Walviskop Mining Permit Decision

Kazera Global plc, the AIM quoted investment company, is pleased to advise
that the Department of Mining and Mineral Resources has dismissed a third
party's appeal against the grant of a mining permit to the Company's 60% owned
subsidiary Whale Head Minerals (Pty)Ltd ("WHM").  WHM now expects to shortly
receive final documentation allowing it to commence production operations of
heavy mineral sands ("HMS") at the Walviskop mine in South Africa.

Ore production from the JORC compliant resource at the Walviskop mine is
expected to generate positive cashflow from operations within six months of
receipt of the Mining Permit being granted over a 5Ha beach sand deposit at
Walviskop. Walviskop sits within the diamond mining operations of the
Company's other South African subsidiary, Deep Blue Minerals.

 Highlights

·       The Company expects to produce circa 6,000 tons of HMS per
month, achieving an estimated gross profit of in excess of US$ 300,000 per
month (based on current prices), within six months of the Mining Permit being
granted.

·       The Mining Permit gives WHM the right to mine a 5Ha beach sand
deposit at Walviskop with:

o  JORC Indicated Mineral Resource of 3.11 million tons of Valuable Heavy
Minerals at a grade of 61.2%

o  Predominant Valuable Heavy Minerals are Garnet (30.29% Run of Mine
("ROM")) and Ilmenite (27.54% ROM).

o  Also present are Zircon and Rutile which have not been included in the
modelling.

o  Independent NPV of approximately £150 million (applying a 20% discount
rate) based on current FX rates.

·       Potential partners have already been identified to build the
Walviskop processing plant.

·       WHM has applied for a prospecting right over an adjacent beach
which appears to share similar characteristics to Walviskop and which is
approximately 34 times larger.

·       Start up costs of the Walviskop mine are anticipated to be
covered by cash flows from Kazera's Alexander Bay Diamond Mine in South Africa
and Tantalum Valley Mine in Namibia.

 

Background on HMS Deposits

The opportunities represented by the HMS deposits in the vicinity of Alexander
Bay/Port Nolloth were recognized as early as 2016. Previous access to these
deposits had been made difficult by their location within the highly protected
diamond mining areas on the West Coast. These HMS deposits contain substantial
diamond deposits which means that HMS miners cannot obtain permission to mine
them. However, conversely, the density of the HMS makes it prohibitively
expensive for diamond miners to extract diamonds. With Deep Blue, a Kazera
subsidiary, having the right to mine diamonds and Whale Head holding the
rights to mine HMS, the Company has overcome these issues. Further
efficiencies will also be gained in the mining process during the first stage
in the separation process as the gravel (containing diamonds) is separated
from the sand (containing Valuable Heavy Minerals).

The Company also expects that the 5-year Life of Mine of the 5 Ha deposit will
be considerably enhanced due to the effect of wave action redepositing HMS on
the mined areas. This wave action should also ensure that rehabilitation is
constantly carried out.

 

Forward Strategy

The Mining Permit gives WHM the right to mine a 5 Ha deposit. This will give
the company a 5-year period to mine the deposit, with the possibility of
further extensions. The project has been assessed by Creo Design (Pty) Ltd an
independent third party who has concluded that it contains a JORC compliant
Indicated Mineral Resource of 3.11 million tons at a zero-cut-off grade of
61.2% valuable Heavy Minerals. Of these, Garnet (30.29% ROM) and Ilmenite
(27.54% ROM) predominate, with some Zircon (1.2% ROM) and some Rutile (0.92%
ROM). The latter two minerals have been excluded for modelling purposes due to
the negligible contribution and high capital cost to separate.

The Company anticipates, within 6 months of the grant of the Mining Permit,
generating 6,000 tons of HMS per month with an expected gross profit of in
excess of US$ 300,000 per month. WHM have also applied for a Prospecting Right
over the adjacent beach which will allow up to 5 years to conduct exploration
although the intention is to apply for Mining Rights over both properties
within a much shorter time frame.

Simultaneously, discussions have already commenced with independent third
parties to build and operate a plant at their own cost to separate out the
various component minerals, which will considerably increase profitability to
WHM without increasing overhead. Prior to that, unseparated material will be
sold in bulk.

In addition, and, as a by-product of the HMS operation, Deep Blue Minerals now
expects to generate around 300 ct per month of additional diamond production
from the HMS operation - this being incremental production to complement our
existing diamond operations. Beach diamonds tend to be larger and higher
quality than those found inland and so it is expected that these diamonds will
attract a premium at auction. Inland diamonds typically attract prices of
circa US$ 250 per carat, whereas the Company confidently expects these
diamonds to exceed a price of US$ 750 per carat.

 

Dennis Edmonds, Kazera Chief Executive Officer, commented:

 

"This has been an incredible week for Kazera. We have been anticipating being
granted the right to mine Walviskop since January of this year and to receive
this news within a week of us concluding the Lithium investment announced last
week is great timing.

The rejection of the Appeal reflects our previously expressed confidence that
the correct procedures had been followed by the Department in initially
approving the Mining Permit."

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No. 596/2014 ('MAR'). Investor Presentation.

For further information on the Company, visit: www.
(http://www.kazeraglobal.com/) kazeraglobal (http://www.kazeraglobal.com/)
.com (http://www.kazeraglobal.com/)

 

 Kazera Global plc (c/o Camarco)                        Tel: +44 (0)203 757 4980

 Dennis Edmonds (CEO)

 finnCap (Nominated Adviser and Joint Broker)           Tel: +44 (0)207 220 0500

 Christopher Raggett / Tim Harper (Corporate Finance)

                                                        Tel: +44 (0) 207 220 9797

 Peterhouse Capital Limited (Joint Broker)

 Duncan Vasey and Lucy Williams (Corporate Broker)

 Camarco (PR)                                            Tel: +44 (0)20 3781 8331

 Gordon Poole / James Crothers / Hugo Liddy

 

**ENDS**

 

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