TIDMKZG
RNS Number : 9926T
Kazera Global PLC
28 July 2022
Kazera Global plc
("Kazera" or the "Company")
Favourable Walviskop Mining Permit Decision
Kazera Global plc, the AIM quoted investment company, is pleased
to advise that the Department of Mining and Mineral Resources has
dismissed a third party's appeal against the grant of a mining
permit to the Company's 60% owned subsidiary Whale Head Minerals
(Pty)Ltd ("WHM"). WHM now expects to shortly receive final
documentation allowing it to commence production operations of
heavy mineral sands ("HMS") at the Walviskop mine in South
Africa.
Ore production from the JORC compliant resource at the Walviskop
mine is expected to generate positive cashflow from operations
within six months of receipt of the Mining Permit being granted
over a 5Ha beach sand deposit at Walviskop. Walviskop sits within
the diamond mining operations of the Company's other South African
subsidiary, Deep Blue Minerals.
Highlights
-- The Company expects to produce circa 6,000 tons of HMS per
month, achieving an estimated gross profit of in excess of US$
300,000 per month (based on current prices), within six months of
the Mining Permit being granted.
-- The Mining Permit gives WHM the right to mine 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% Run of
Mine ("ROM")) and Ilmenite (27.54% ROM).
o Also present are Zircon and Rutile which have not been
included in the modelling.
o Independent NPV of approximately GBP150 million (applying a
20% discount rate) based on current FX rates.
-- Potential partners have already been identified to build the Walviskop processing plant.
-- WHM has applied for a prospecting right over an adjacent
beach which appears to share similar characteristics to Walviskop
and which is approximately 34 times larger.
-- Start up costs of the Walviskop mine are anticipated to be
covered by cash flows from Kazera's Alexander Bay Diamond Mine in
South Africa and Tantalum Valley Mine in Namibia.
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 obtain permission to
mine them. However, conversely, the density of the HMS makes it
prohibitively expensive for diamond miners to extract diamonds.
With Deep Blue, a Kazera subsidiary, 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 expects 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 should
also ensure that rehabilitation is constantly carried out.
Forward Strategy
The Mining Permit gives WHM the right to mine a 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 Creo Design (Pty) Ltd 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%
valuable Heavy Minerals. Of these, Garnet (30.29% ROM) and Ilmenite
(27.54% ROM) predominate, with some Zircon (1.2% ROM) and some
Rutile (0.92% 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 US$ 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.
Simultaneously, discussions have already commenced with
independent third parties to build and operate a plant at their own
cost to separate out the various component minerals, which will
considerably increase profitability to WHM without increasing
overhead. Prior to that, unseparated material will be sold in
bulk.
In addition, and, as a by-product of the HMS operation, Deep
Blue Minerals now expects 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 US$ 250 per carat, whereas the Company
confidently expects these diamonds to exceed a price of US$ 750 per
carat.
Dennis Edmonds, Kazera Chief Executive Officer, commented:
"This has been an incredible week for Kazera. We have been
anticipating being granted the right to mine Walviskop since
January of this year and to receive this news within a week of us
concluding the Lithium investment announced last week is great
timing.
The rejection of the Appeal reflects our previously expressed
confidence that the correct procedures had been followed by the
Department in initially approving the Mining Permit."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No. 596/2014 ('MAR'). Investor
Presentation.
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 Joint Broker) Tel: +44 (0)207 220 0500
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) Tel: +44 (0)20 3781 8331
Gordon Poole / James Crothers / Hugo Liddy
**ENDS**
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