TIDMKZG
RNS Number : 4591N
Kazera Global PLC
30 September 2021
30 September 2021
Kazera Global plc
( " Kazera " or the "Company" )
Whale Head Minerals Acquisition - Completion of Cash Generative
Heavy Mineral Sands Project
Kazera Global plc, the AIM quoted investment company, is pleased
to announce that, further to previous announcements, it has agreed
with Tectonic Gold PLC to acquire a 60% controlling stake in Whale
Head Minerals (Pty) Ltd (" WHM "). A consideration of $250,000 of
Kazera ordinary shares will be paid for the 60% share in WHM which
owns two Heavy Mineral Sands (" HMS ") opportunities in the Port
Nolloth/ Alexander Bay area of South Africa. The JORC compliant
Walviskop project being acquired is expected to bring near term
cashflow within 6 months of a Mining Permit being granted over a
5Ha beach sand deposit at Walviskop.
Highlights
-- Kazera will acquire 60% of WHM (10% will be retained by
Tectonic and 30% is held on trust for future Black Economic
Empowerment Partners).
-- Price to be satisfied by the issue of $250,000 worth of
Kazera Ordinary shares at the volume weighted average price for 30
days (1.358 pence) preceding 28 September 2021. The number of
shares being issued is 13,527,957. These shares will be locked in
for a period of 1 year.
-- Acquisition brings near term cash flow with the Company
aiming, within 6 months of the Mining Permit being granted, to
produce circa 6,000 tons of HMS per month, achieving an estimated
gross profit of in excess of $300,000 per month based on current
prices.
-- WHM is awaiting the final grant of a Mining Permit over 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% of ROM)
and Ilmenite (27.54% of ROM).
o Also present are Zircon and Rutile which have not been
included in the modelling.
o NPV of approximately GBP150 million (applying a 20% discount
rate) based on current FX rates.
-- WHM is also in the process of applying for a Prospecting
Right over an adjacent beach which appears to share similar
characteristics to Walviskop and which is approximately 34 times
larger.
-- Establishment costs of operation are anticipated to be
covered by increasing production from Kazera's diamond and tantalum
mining businesses.
-- Potential partners have already been identified to build a
Processing Plant on site - at their own cost, which will improve
beneficiation and profitability.
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 get permission to mine
them. However, conversely, the density of the HMS makes it
prohibitively expensive for diamond miners to extract diamonds.
With Deep Blue 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 notes 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 also
ensures that rehabilitation is constantly carried out.
Forward Strategy
WHM are currently awaiting the grant of a Mining Permit over the
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 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% v
aluable Heavy Minerals. Of these, Garnet (30.29% of ROM) and
Ilmenite (27.54% of ROM) predominate, with some Zircon (1.2% of
ROM) and some Rutile (0.92% of 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 $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. A combined Life of Mine of in excess of
25 years is forecast .
Simultaneously, the intention is to co-operate with an
independent third party to build and operate a plant at its own
cost to separate out the various component minerals, which will
considerably increase profitability to WHM without increasing
overhead.
In addition, and, as a byproduct of the HMS operation, Deep Blue
Minerals now expect 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 $250 per carat, whereas the Company
confidently expects these diamonds to exceed a price of $750 per
carat.
Muisvlak Plant ( "the Plant" )
Kazera and MV5 are delighted to report that the Plant started
operating on the 28(th) of this month, ahead of schedule. The
intention is to operate the Plant for a week in order to process
the majority of the contractors' gravels and meet the auction
cut-off date of 1 October 2021. The Plant will then be closed for a
week to consolidate operating conditions. This will assist
contractors in getting their gravels processed but will also allow
the necessary refurbishment of the Plant to take place.
Ordinary Shares in Issue
Application has been made to the London Stock Exchange for the
13,527,957 new Ordinary Shares to be admitted to trading on AIM and
admission is expected to occur on or around 8.00am 5 October 2021.
The new Ordinary Shares will rank pari passu with the existing
Ordinary Shares in issue.
Total Voting Rights
Following Admission, the issued share capital of the Company
will be 723,295,609 Ordinary Shares and this figure may be used by
shareholders as a denominator for the calculations by which they
will determine if they are required to notify their interest in or
change to their interest in the Company under the Disclosure
Guidance and Transparency Rules published by the UK Financial
Conduct Authority. There are no Ordinary Shares held in treasury
and each Ordinary Share entitled the holder to a single vote at
general meetings of the Company. Therefore, the total number of
voting rights in the Company will be 723,295,609.
Dennis Edmonds, Kazera Joint Chief Executive Officer, c
ommented:
"The next few months will be revolutionary for the Company. With
the Company on the verge of bringing its diamond and Tantalum
operations into profitable production, now is the perfect time to
bring the HMS project on board. We have worked very closely with
Tectonic who have done a great job in adverse circumstances to
progress the Mining Permit and the Prospecting Right. With the
Mining Permit expected to be issued before the end of the year and
the Prospecting Right lodged, we are now moving forward with
negotiations with potential partners on setting up an HMS
Separation Plant.
"The intention has always been to use diamond production as a
means of funding future developments and it is very exciting for
the Kazera Board to see the whole plan now starting to come
together."
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
Dennis Edmonds/Larry Johnson (Joint
CEO's)
finnCap (Nominated Adviser and Tel: +44 (0)207 220 0500
Joint Broker)
Christopher Raggett / Charlie
Beeson (corporate finance)
Camarco (PR)
Gordon Poole / James Crothers Tel: +44 (0)20 3781 8331
/ Hugo Liddy
**ENDS**
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END
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