TIDMKZG
RNS Number : 5525P
Kazera Global PLC
21 June 2022
21 June 2022
Kazera Global plc
("Kazera" or the "Company")
Acquisition of Rare Earth Elements Project in Kenya
Kazera Global plc, the AIM quoted investment company, is
delighted to announce the signature of Binding Heads of Terms for
the proposed acquisition of a 71% interest in Great Lakes Graphite
(PTY) Ltd ("Great Lakes Graphite"), which owns 100% of 3
exploration licenses covering the Homa Bay and Buru Hill Rare Earth
Elements projects (the "Project") in Kenya.
This is in accordance with the Company's investing policy to
achieve shareholder returns through direct investments in companies
and accretive projects in Africa within the mining and resource
sectors.
Transaction Highlights
-- Acquisition of controlling interest in the Homa Bay and Buru
Hill exploration licenses in Kenya which comprises of Rare Earth
Element exploration opportunities
o Rare Earth Elements are a major constituent material in the
manufacturing of magnets which are used for electronic vehicles and
turbines
-- New country entry, in an area of significant local and
national infrastructure, supported by a new, progressive Mining Act
and fast-growing exploration and mining presence
-- Two initial exploration targets:
o Buru Hill's PL305 license, which has a previous JORC compliant
exploration target of 27Mt @1.89% grade for 510Kt Total Rare Earth
elements ("TREO's") and;
o Kuge area, PL303 licence, which has demonstrated extensive
zones of elevated Light Rare Earth Elements within drilling along a
strike length of 500m
-- At-surface mineralisation presents highly favourable conditions for economic recovery
-- JORC Compliant Resource and Scoping Study expected within 6 months
-- Planned, low-impact work programme to progress licences to
the granting of a Definitive Feasibility study for a cost of up to
US$2.5m, funded via future cash flows
-- Historic detailed data estimates approximately 65,000 tonnes
of Ce, 52,000 tonnes of Lanthanum and 18,000 tonnes of Nd from an
assumed low recovery rate of 50% of the top 50m layer of the
resource
-- Terms of the acquisition are found below
Dennis Edmonds, Chief Executive Officer of Kazera commented:
"At Kazera, we are continually looking at new and exciting
opportunities to deliver shareholder value both through operational
delivery, but also through accretive acquisitions. The acquisition
of a 71% interest in Great Lakes Graphite, gives the Company a
unique exposure to three highly exciting exploration licenses which
have demonstrable potential for economic delivery of some of the
most important materials for the 21 (st) century.
"With our diamond operation already in production, tantalum
about to come on stream and the expected imminent resolution of the
issues around our HMS licence, the Company will soon have three
separate revenue streams. This acquisition represents an exciting
new opportunity for our Company to utilise its increasing cash flow
to deliver material growth and a step change in outlook for our
shareholders."
Rationale and Background to the Acquisition
Kenya is a stable country with an established infrastructure.
Great Lakes Graphite own 3 licences in near proximity to each other
in Kenya, covering a total area of 346 square kilometres. The
majority of historical work has only been done in one licence area,
Buru Hills, which has a JORC compliant exploration target of 27Mt
at a grade of 1.89% Total Rare Earth Elements. The licence areas
are all near established rail and road transport links and
proximate to large towns.
Establishing a JORC compliant Resource and Scoping Study will
only take approximately 6 months and will require a detailed survey
as well as resampling of the core samples and revised modelling to
calculate revised tonnages and grades. We anticipate having a
Definitive Feasibility Study in hand within 24-30 months. Extensive
historical work has been already been undertaken and a vast amount
of information on the project already exists.
Transaction Details
As per the terms of the acquisition, Kazera will acquire a 71%
interest in Great Lakes Graphite. The acquisition is for in
aggregate GBP750,000 to be paid for in three stages with all
consideration to be satisfied by the issuance of shares in Kazera
to the vendors. Completion of the various stages of the planned
work programme are as follows:
-- First tranche, of GBP250,000 at 1.5p per share, locked in for one year.
-- Second Tranche, of GBP250,000 at completion of the Definitive
Feasibility Study ("DFS"), at the lower of 2.5p per share or the 10
days VWAP preceding the DFS RNS announcement, also locked in for
one year.
-- Third Tranche, of GBP250,000 on initial ore production at the
lower of 2.5p per share or the 10 days VWAP preceding the RNS
announcement of initial production. No share lock in.
Identified exploration milestones will be funded by Kazera and
will lead to completion of a DFS and facilitate the granting of a
Mining License over the project. Cumulatively, these technical
milestones are expected to cost up to US$2.5m and will be funded
through the Company's cash flows. Completion of all milestones is
expected to take 24-30 months.
As part of the transaction, Kazera will also grant an option to
Caracal Investments Limited ("CI") to acquire 20% of Great Lakes
Graphite Pty Ltd for the sum of $1m. This option period will run
for 18 months from the period of execution. Assuming the exercise
of the option the shareholding of Great Lakes Graphite will be 51%
Kazera, 20% CI and 29% current shareholders.
If CI elect to not exercise the option, the current shareholders
in Great Lakes Graphite can take over the option on the same
terms.
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 (CEO)
finnCap (Nominated Adviser and Tel: +44 (0)207 220 0500
Joint Broker)
Christopher Raggett / Tim Harper
(Corporate Finance) Tel: +44 (0) 207 220 9797
Peterhouse Capital Limited (Joint
Broker)
Duncan Vasey and Lucy Williams (Corporate
Broker)
Camarco (PR)
James Crothers / Hugo Liddy / Gordon Tel: +44 (0)20 3781 8331
Poole
**ENDS**
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