REG - Shuka Minerals PLC - Rukwa Operational update

Shuka MineralsAnnouncement

22/05/2025 07:00

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RNS Number : 6837J  Shuka Minerals PLC  22 May 2025

22 May 2025

Shuka Minerals Plc

("Shuka" or the "Company")

Rukwa Operational update

Shuka Minerals Plc (AIM: "SKA"), an African focused mine operator and
developer, is pleased to provide an update on the Company's proposed restart
of the Rukwa Coal mine in Western Tanzania. This follows the Company's
successful admission to trading on the Johannesburg Stock Exchange on 21 May
2025.

Update:

·    A detailed restart Capex plan has been formulated by the senior
management on site and members of the board; this has been approved and
initial funding is expected to be drawn in late May 2025 from the balance of
the loan facility with GMI.

·    A staged ramp up between June and September 2025 is targeting 500tpcm
production by the end of the period. Further capex will aim to increase this
to 2,000tpcm, 3,000tpcm and eventually 5,000 tpcm by end 2026 / H1 2027.

·    Initial restart, equipment servicing, parts replacement and wash
plant testing are budgeted at USD12,600 and this is expected to realise the
initial 500tpcm tonnages.

·    Further capex of USD132,600, providing additional leased and
purchased equipment such as loaders and excavators is planned to gradually
realise the stepped tonnages up to 5,000tpcm.

·    Significant capex of c.USD1m+ would be required to increase tonnages
beyond 5,000tpcm to 7,500tpcm plus, requiring a parallel wash plant and
further machinery and excavators. This will be assessed by the board in due
course.

·    The mine has historically produced 4,000tpcm of washed coal, however
in recent times production has been on hiatus awaiting funding and restart
plans and also addressing weather issues in the area.

·    63T of stockpiled washed coal will be used to test the wash-plant
during restart and then sold; value at USD45/t is USD2,835.

·    A further estimated 60,000T of fines material is also stockpiled and
will be offered to previous contracted cement plants within Tanzania, Kenya
and Rwanda at between USD7-8/T which would realise sales of between
USD420,000-480,000 in due course.

·    A management assessment of the staged ramp up returns a project
NPV10* of USD12.61m and an IRR of 80% based on a USD45/T sales price and a
USD25/T margin for washed coal and utilizes the capex assumptions above. Fines
sales are not included in this calculation. These calculations have not been
independently verified.

·    The prospects for further mine expansion are along strike from
current operations and where the coal seam continues. Whilst the seam is
occasionally "jogged" a few metres, due to normal and reverse faulting, it
allows for a lower strip ratio as it is near surface with less overburden.

·    We will update with further details as the re-start plans progress.

 

 

Richard Lloyd, CEO, said:

 

"The restart of Rukwa is essential to return some operational cashflow to
Shuka Minerals. The asset has lacked the care and funding required to have a
meaningful operation. However, a methodical approach to capex planning and
budgeting, as well as benefiting from the sales of stockpiles, will breathe
life back into the operation.

 

Only modest capex is required to restart operations and test the wash plant.
From there we can gradually ramp up production and return Rukwa to historic
levels of production and beyond."

 

 

 

* estimated net present value using a discount rate of 10%.

 

 

About Shuka Minerals:

 

Shuka Minerals plc, is a dynamic and innovative mining and development
company, committed to exploring and harnessing Africa's mineral resources.
Shuka's focus lies in the acquisition and development of valuable minerals,
aiming to contribute to the sustainable growth and development of local
communities.

 

Shuka has an operating coal mine in Tanzania, which capacity is under
consideration for upgrading by management depending on funding and strategic
direction. Shuka is also considering projects in Zambia, South Africa, and
other African countries that are rich in copper, lead, and zinc.

 

The Company has signed a conditional Share Purchase Agreement with Leopard
Exploration and Mining Limited ("LEM") to acquire 100% of LEM's share capital.
LEM is the registered holder of a large-scale mining license 12848-HQ-LML
issued in December 2014 for a period of 25 years, and which includes the
historical Kabwe Zinc Mine ("Kabwe Mine") located in central Zambia, approx.
110km north of the capital city of Lusaka.

 

The Kabwe Mine, was previously operated by Anglo American plc and Zambia
Consolidated Copper Mines Limited, and was mined continuously for 88 years
until its closure in 1994, due to the then current commodity prices. It was
ranked as one of the world's highest-grade zinc and lead mining operations and
is considered one of the famous mines in Africa, holding a position of
national economic importance in Zambia.

 

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR") and is disclosed
in accordance with the Company's obligations under Article 17 of MAR.

 

For Enquiries:

 Shuka Minerals Plc                       +44 (0) 7990 503007

 Richard Lloyd - CEO
 Strand Hanson Limited                    +44 (0) 20 7409 3494

 Financial and Nominated Adviser

 James Harris | Richard Johnson
 Tavira Securities Limited                +44 (0) 20 7100 5100

 Joint Broker

 Oliver Stansfield | Jonathan Evans
 Peterhouse Capital Limited

 Joint Broker                             +44 (0)20 7469 0930

 Charles Goodfellow | Duncan Vasey
 Investor Relations

 Faith Kinyanjui Mumbi                    +254 746 849 110
 JSE Sponsor                              +27 11 480 8500

 AcaciaCap Advisors Proprietary Limited

 Michelle Krastanov | Kay Stoler

 

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