REG - Kazera Global PLC - Perdevlei Heavy Mineral Sands

Kazera GlobalAnnouncement

15/10/2024 07:00

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RNS Number : 1346I  Kazera Global PLC  15 October 2024

This announcement contains inside information for the purposes of Regulation
11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the
publication of this announcement via a Regulatory Information Service, this
inside information is now considered to be in the public domain.

 

15 October 2024

Kazera Global plc

("Kazera" or "the Company")

Perdevlei Heavy Mineral Sands

Kazera Global plc (AIM: KZG), the AIM-quoted investment company, is pleased to
announce that its subsidiary, Whale Head Minerals (Pty) Ltd ("WHM"), has been
requested by the Department of Mineral Resources and Energy ("DMRE") to
furnish a guarantee in respect of its obligations to rehabilitate the mining
area covered by its application for a Mining Right.

 

The application for a Mining Right is for an area called 2a or Perdevlei which
covers circa 3,095 hectares, of which approximately 170 hectares contain high
heavy mineral sands ("HMS") deposits suitable for immediate mining. Perdevlei
is a short distance north of WHM's current Walviskop HMS project of 5
hectares. The Company believes the richness of the HMS deposit at Perdevlei to
be at least as good as that at Walviskop and, like Walviskop, the HMS are
constantly replenished by wind and tidal action.

 

Due to WHM's knowledge of the Perdevlei area and its confidence in its ability
to mine HMS in the region, it has elected to apply for a Mining Right for the
concession, rather than adopting the traditional route of applying for a
Prospecting Right and then, after a period of mapping, drilling and sampling,
apply for a Mining Right to the site. The Company believes that this approach
best aligns with its objective to grow the company and create shareholder
value on an accelerated timescale.

 

As such, the Company can confirm that WHM has been requested by the DMRE to
provide a guarantee for its obligations under the Mining Right. This guarantee
ensures that sufficient funds are available to undertake rehabilitation and
remediation of any adverse environmental impacts of mining activities, both
during the life of the mine and at closure. This is a requirement under South
Africa's National Environmental Management Act ("NEMA") and to meet this
obligation the Company has purchased an insurance, which is standard practice
across the mining industry.

The DMRE now has a defined period in which to review WHM's application and
issue the Environmental Authorisation ("EA"). If this process is successful,
the EA is expected to be issued by the end of January 2025 following which
there is a 21 day period for interested and affected parties to lodge any
appeals before the Mining Right can be granted. If so granted, WHM will
immediately be entitled to commence the extraction and sale of HMS on the
Perdevlei concession.

To fund the insurance policy required under NEMA, the Company has entered into
a short term loan agreement (the "Loan Agreement") with one of its largest
shareholders, Tracarta Limited, pursuant to which it has agreed to provide the
Company with an unsecured term loan of £45,000.

 

Dennis Edmonds, Chief Executive Officer of Kazera Global plc commented: "The
request for the Environmental Guarantee is an enormously encouraging step in
our progress towards obtaining a Mining Right. With our Walviskop heavy
mineral sands project expected to be generating revenue imminently, the timing
of this could not be better.

 

"During the last few years we have accumulated a great deal of knowledge on
the quality of the heavy mineral sands in the Alexander Bay area and how best
to mine and process them. We believe that Perdevlei, containing HMS deposits
of over 30 times those of Walviskop, offers us the opportunity to scale up our
heavy mineral sands business to make us a significant operator in the region.

 

"I would like to thank Tracarta for making funds available to allow us to
progress with the Mining Right application, without putting pressure on
existing cash resources as we move towards cash generation."

 

Principal terms of the Loan Agreement

The principal terms of the Loan Agreement are as follows:

·    Loan - The loan is for a capital amount of £45,000 plus an
arrangement fee of £4,000

·    Interest - Interest will accrue on the Loan at a fixed rate of 8%,
irrespective of early repayment of the Loan

·    Term - The Loan is repayable, together with interest , on or before
31 March 2025

 

Related Party Transaction

Kazera is entering into the Loan Agreement with Tracarta Limited, which is a
significant shareholder in the Company, as such term is defined in the AIM
Rules for Companies. Additionally, Dr John Wardle, Non-Executive Chairman of
Kazera is the shareholder of Tracarta Limited. Accordingly, entering into the
Loan Agreement with Tracarta constitutes a related party transaction under
Rule 13 of the AIM Rules for Companies.

 

As such, the Directors of the Company, excluding Dr John Wardle, consider,
having consulted with Cavendish Capital Markets Limited, the Company's
Nominated Adviser, that the terms of the Loan Agreement with Tracarta Limited
are fair and reasonable insofar as the Company's shareholders are concerned.

 

**ENDS**

 

 Kazera Global plc                                             kazera@stbridespartners.co.uk

 Dennis Edmonds, CEO                                            

 Cavendish Capital Markets Ltd (Nominated Adviser and Broker)

 Derrick Lee / Pearl Kellie (Corporate Finance)                Tel: +44 (0)207 220 0500

  
 St Brides Partners (Financial PR)

 Paul Dulieu / Isabel de Salis                                 kazera@stbridespartners.co.uk (mailto:kazera@stbridespartners.co.uk)

                                                                 

 

About Kazera Global plc

Kazera is a global investment company focused on leveraging the skills and
expertise of its Board of Directors to develop early-stage mineral exploration
and development assets towards meaningful cashflow and production. Its three
principal investments are as follows:

 

Alluvial diamond mining through Deep Blue Minerals (Pty) Ltd, Alexander Bay,
South Africa

Kazera currently has a 100% direct interest in Deep Blue Minerals, of which
74% is held beneficially by Kazera and 26% is held on behalf of Black Economic
Empowerment partners.

 

Heavy Mineral Sands mining (including ilmenite, monazite, rutile, and
zircon)  through Whale Head Minerals (Pty) Ltd, Alexander Bay, South Africa.

Kazera currently has a 70% direct beneficial interest in Whale Head Minerals
together with the benefit of a loan facility entitling it to receive
approximately £38m out of dividends from the other shareholders.

 

Tantalite mining in South-East Namibia (divestment in progress)

As announced on 20 December 2022, Kazera has agreed to dispose of African
Tantalum (Pty) Ltd ("Aftan") for a cash consideration of US$13 million plus a
debenture payment of 2.5% of the gross sales of produced lithium and tantalum
for life-of-mine. Completion of the sale is subject to receipt of full
consideration proceeds. Aftan has been deconsolidated from the Company's
financial statements with effect from 4 January 2023 because in accordance
with the terms of the sale agreement, it has relinquished control of the Aftan
in favour of the purchaser, Hebei Xinjian Construction Close Corp ("Hebei
Xinjian") with effect from that date. Kazera retains the right to cancel the
transaction and retain all amounts paid to date in the event of default by
Hebei Xinjian. The Company is now instituting legal proceedings against Hebei
for payment of the balance due to it.

 

The Company will consider additional investment opportunities as appropriate,
having regard to the Group's future cash flow requirements.

 

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