REG - Kropz PLC - Elandsfontein Update and Bridge Loan Facility

KropzAnnouncement

27/04/2022 07:00

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RNS Number : 4395J  Kropz PLC  27 April 2022

The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

 

27 April 2022

Kropz Plc

("Kropz" or the "Company")

 

Elandsfontein Phosphate Project Update and Bridge Loan Facility

 

Kropz Plc (AIM: KRPZ), an emerging African phosphate producer and developer,
reports that due to slower than expected progress in the ramp up of operations
at Kropz Elandsfontein (Pty) Ltd ("Elandsfontein"), production of sufficient
phosphate rock concentrate for the first bulk sale will be achieved later in
Q2 than originally expected. The delay has largely been driven by the need to
re-engineer parts of the fine flotation circuit as proposed by the vendor,
but has also been caused by early unpredicted ore variability and lack of
operator experience.

 

This delay will result in a funding requirement of ZAR58 million at the end of
April 2022 for Kropz Elandsfontein.

 

In order to cover part of this funding requirement, Kropz will draw down, on
26 April 2022, the remaining ZAR33 million (approximately US$2.11 million)
conditional convertible equity facility of up to ZAR 200 million ("ZAR Equity
Facility"), with its major shareholder, the ARC Fund ("ARC"), as announced on
29 September 2021. This will be the final drawdown of the ZAR Equity Facility.

 

Kropz and ARC have also agreed to a further ZAR25 million (approximately
US$1.60 million) bridge loan facility (the "Loan") to meet immediate cash
requirements at Elandsfontein at the end of April 2022.

 

The Loan is repayable on demand, and there are no fixed repayment terms. It is
repayable by Kropz on no less than two business days' notice. Interest is
payable on the Loan at 14% nominal, compounded monthly. The Loan is unsecured
and is subject to legal documentation, and Kropz is expected to draw down the
Loan on or around 28 April 2022.

 

Due to the anticipated delay in production ramp-up, Kropz is exploring further
funding options with ARC to fund any additional working capital requirements
for Elandsfontein through to positive cash flow. This amount is expected to be
in the region of approximately ZAR 100 million to ZAR 150 million and is in
addition to the final drawdown of the ZAR Equity Facility and the Loan (equal
to ZAR 58 million).

 

The Loan is a related party transaction pursuant to Rule 13 of the AIM Rules
for Companies. Machiel Reyneke, a director of the Company, is the
representative of ARC. Mike Nunn, a director of the Company, is the beneficial
owner of Kropz International SARL ("Kropz International"). ARC and Kropz
International are treated as acting in concert for the purposes of the City
Code on Takeovers and Mergers. Accordingly, neither has been involved in the
approval of the Loan by the Company's board. The directors of the Company, who
are considered independent for the purposes of the Loan, having consulted with
the Company's nominated adviser, consider the terms of the Loan to be fair and
reasonable insofar as the Company's shareholders are concerned.

 

The Company will provide further updates in due course.

 

For further information visit www.kropz.com (http://www.kropz.com/)  or
contact:

 

 Kropz Plc
 Mark Summers (CEO)                +27 (0) 79 744 8708

 Grant Thornton UK LLP             Nominated Adviser
 Samantha Harrison                 +44 (0) 20 7383 5100

 Harrison Clarke

 George Grainger

 Ciara Donnelly

 Hannam & Partners                 Broker
 Andrew Chubb                       +44 (0) 20 7907 8500

 Ernest Bell

 Tavistock                         Financial PR & IR (UK)
 Nick Elwes                        +44 (0) 207 920 3150

 Jos Simson                        kropz@tavistock.co.uk

 Oliver Lamb

 R&A Strategic Communications      PR (South Africa)
 James Duncan                      +27 (0) 11 880 3924

                                   james@rasc.co.za

 

About Kropz Plc

Kropz is an emerging African producer and developer of plant nutrient feed
minerals with phosphate projects in South Africa and the Republic of Congo.
The vision of the Group is to become a leading independent phosphate rock
producer and to develop into an integrated, mine-to-market plant nutrient
company focusing on sub-Saharan Africa.

-ENDS-

 

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