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(Alliance News) - Kazera Global PLC on Tuesday said it has agreed to acquire a controlling interest in Great Lakes Graphite Ltd, which holds exploration licenses in rare earth elements projects in Kenya.
The Cardiff-based investment company will acquire a 71% interest in Great Lakes for an aggregate consideration of GBP750,000, to be paid in shares in three tranches of GBP250,000.
Great Lakes holds 100% of three exploration licenses covering the Homa Bay and Buru Hill rare earth elements in Kenya.
The at-surface mineralisation presents "highly favourable conditions for economic recovery", Kazera said, with JORC compliant resource and scoping study expected within six months.
Historic data estimates 65,00 tonnes of cerium, 52,000 tonnes of lanthanum and 18,000 tonnes of neodymium from an assumed recovery rate of 50% at the top 50 metre layer of the resource,
The first tranche will be paid at 1.5 pence a share, to be locked in for one year. The second tranche will be due on completion of the Defined Feasibility Study at the lower of 2.5p per share or the volume average price of the 10 days preceding, also locked in for one year.
The third tranche is due on initial ore production on the same price terms as the second tranche.
"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," said Chief Executive Officer Dennis Edmonds.
Shares in Kazera were 2.5% lower at 0.90 pence each in London on Tuesday midday, having reached a high of 1.0p in morning trade.
Kazera will also grant an 18-month option to Caracal Investments Ltd to acquire 20% of the interest in Great Lakes, which would leave Kazera with 51%, and existing shareholders with 29%. If Caracal does not exercise the option, existing shareholders may do so on the same terms.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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