TIDMKZG
RNS Number : 2273M
Kazera Global PLC
20 September 2021
Kazera Global plc
("Kazera" or the "Company")
Diamond Processing Plant Update - Significant Impact to Kazera
Throughput
Kazera Global plc, the AIM quoted investment company, is pleased
to provide an update in relation to the Muisvlak Diamond Processing
Plant which the Company currently uses for its diamond mining
activities at Alexander Bay, South Africa.
Highlights
-- Six times increase to Muisvlak Diamond Processing Plant (the
"Plant") throughput anticipated as a result of the establishment of
a Joint Venture between MV FIVE (Pty) Ltd ("MV5"), a company
representing the local community, and Kazera which will see MV5
taking over control of the Plant as part of a 5 year contract
o As part of the deal, throughput at the Plant is expected to
increase six-fold to 35,000 tons of gravel per month, significantly
increasing the amount of gravel Kazera can process from its
activities at Alexander Bay
o Profits from the joint venture, which will come from other
operators utilizing the Plant, will be split on a 30/70 basis in
favour of Kazera
o The joint venture expects significant job creation within the
local and regional community
-- It is anticipated that increased throughput will be achieved
by increasing the number of shifts as well as completing various
operational efficiencies
o The Plant is anticipated to become operational by 1 October
2021
-- Management of the Plant also gives the joint venture access
to a mining area containing over 400,000 carats of diamonds.
-- Kazera expects the change in plant ownership to significantly
increase the profitability of its Diamond mining operations
Following discussions with Alexkor and the local community,
Alexkor has agreed that MV FIVE (Pty) Ltd ("MV5"), a company
representing the local community, will operate the Processing Plant
at Muisvlak (the "Plant") for an initial period of five years as
well as benefiting from a further five year extension option with
the agreement of all parties. MV5 will also have the right to
co-ordinate mining activities in the Southern region of the
Alexander Bay mining area.
MV5 and Kazera have entered into a separate joint venture
agreement, pursuant to which Kazera will bring the Plant up to
required Health and Safety Standards and implement procedures to
improve its operational efficiency. This joint venture will then
manage the Plant and the associated mining activities, with profits
to be shared on a 70/30 basis in favour of Kazera.
Background
The Company's South African subsidiary, Deep Blue Minerals
("Deep Blue"), commenced purchasing machinery in June 2020 and has,
since then, acquired mining blocks and started mining at the
Alexander Bay area. For the last 5 months it has largely been a
positive contributor to the financial performance of the Company.
Deep Blue's operations however have been hampered by its inability
to process all the gravels it has produced as a result of operating
issues at the Plant. Consequently, Deep Blue and other contractors
currently have large stockpiles of diamond bearing gravels awaiting
processing.
The Plant, which was commissioned in 2013 at an estimated cost
of approximately GBP6 million, has the ability to process up to 150
tons per hour of gravel. In recent months it has been only been
operating one shift per day at an average of 7 out of 22 working
days due to difficulties associated with the Covid-19 pandemic and,
more significantly, various staff redundancies that the operators
of the Plant have been forced to implement.
The diminished operations of the Plant have impacted on all
contractors and the local community who rely heavily on the ability
to sell diamonds.
MV5 and Improvements to the Plant
To ensure the proper operation of the Plant, Alexkor have
entered into a contract with the local community, represented by
MV5, pursuant to which MV5 will take over the operation of the
Plant. The contract is for a 5 year period with a possible
extension of a further 5 years.
MV5 have now entered into a joint venture with Kazera, in terms
of which Kazera will undertake to bring the Plant to acceptable
Health and Safety standards and then to implement improvements to
its operation and efficiency. Profits from the joint venture will
be split between MV5 and Kazera on a 30/70 basis in favour of
Kazera.
By investing in a number of upgrades, including a screening
plant to remove oversize materials before they enter the plant
(reducing volumes to be processed as well as wear and tear), Kazera
and MV5 believe that they can run the plant on two 10 hour shifts
per day and achieve a monthly throughput of 35,000 tons of gravel
per month. This is a material increase of 6 times the average
monthly throughput over the recent period which means that Kazera
and the other contractors have the potential to increase their
diamond production by up to six times.
Management of the Plant also gives the MV5/Kazera joint venture
access to a mining area which contains over 400,000 carats of
diamonds.
MV5 and Kazera will also have control of the entire
infrastructure relating to the Plant, including workshops, workers'
accommodation and security. The Plant will also provide an
established base for the mining of Heavy Mineral Sands.
Kazera and MV5 are confident that the Plant can be operational
by 1 October 2021, from which date it will begin generating
revenues for the MV5/Kazera joint venture as contractors incur a
fee per ton processed. This money will be paid directly to the
MV5/Kazera joint venture by the contractors. Of equal importance,
the proper operation of the Plant will allow Deep Blue and other
contractors the opportunity to process the vast stockpiles of
gravel that they have accumulated over the past year and to realise
the value of the diamonds contained therein. It will also allow
Deep Blue to ensure that, in the future, all gravel mined by it in
a mining cycle is processed and ready for final sorting during that
cycle.
Dennis Edmonds, Kazera Joint Chief Executive Officer,
commented:
"This development is a major milestone for our diamond mining
operations.
"We have been severely constrained in the past due to our
inability to process the thousands of tons of gravel that the team
in South Africa have been producing on a monthly basis. This joint
venture has the potential to provide a potential six-fold increase
in diamonds produced, which will create a significant profit for
the Company. It is reflective of the high regard in which our team
in South Africa is held, as well as of the commitment of both
Alexkor and the local community to working together to achieve a
stable and profitable environment for mining contractors and the
wider community."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No. 596/2014 ('MAR').
For further information on the Company, visit: www. kazeraglobal
.com
Kazera Global plc (c/o Camarco) Tel: +44 (0)203 757 4980
Larry Johnson/Dennis Edmonds (Joint CEO's)
finnCap (Nominated Adviser and Joint Broker) Tel: +44 (0)207 220 0500
Christopher Raggett / Charlie Beeson (corporate
finance)
Camarco (PR)
Gordon Poole / James Crothers / Hugo Liddy Tel: +44 (0)20 3781 8331
**ENDS**
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END
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