(Sharecast News) - Investment company Kazera Global has struck a binding heads of terms agreement to acquire a 71% interest in Great Lakes Graphite in order to take control of three exploration licenses covering the Homa Bay and Buru Hill rare earth elements projects in Kenya.
Kazera said on Tuesday that the majority of historical work had only been done in the Buru Hills licence area, which has a JORC compliant exploration target of 27Mt at a grade of 1.89%, with the licence areas all near established rail and road transport links and close to large towns.
The AIM-listed group added that establishing a JORC-compliant resource and scoping study will take approximately six months and require a detailed survey, as well as resampling of core samples and revised modelling to calculate revised tonnages and grades. The company anticipates having a definitive feasibility study in hand within 24-30 months.
Kazera stated the acquisition will cost it a total of £750,000, to be paid for in three £250,000 tranches, with all consideration to be satisfied by the issuance of shares.
Chief executive Dennis Edmonds said: "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."
As of 1115 BST, Kazera shares were up 3.77% at 0.96p.
Reporting by Iain Gilbert at Sharecast.com
Kazera Global (KZG)