Kazera Global, the AIM quoted investment company, announced the signature of Binding Heads of Terms for the proposed acquisition of a 71% interest in 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.

Dennis Edmonds, CEO, Kazera: '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 21st 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.'

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.

As per the terms of the acquisition, Kazera will acquire a 71% interest in Great Lakes Graphite. The acquisition is for in aggregate £750,000 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 £250,000 at 1.5p per share, locked in for one year.
• Second Tranche, of £250,000 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 £250,000 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 $2.5 million 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 (CI) to acquire 20% of Great Lakes Graphite Pty Ltd for the sum of $1 million. 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.

africabusinesscommunities