Keras Resources Regulatory News (KRS)

Keras Resources plc / Index: AIM / Epic: KRS / Sector: Mining

24 December 2018

Keras Resources plc ('Keras' or the 'Company')

Update on Bulk Sampling Programme at Nayega Manganese Project in Togo and Bridge Finance Facility

Keras Resources plc, the AIM listed mineral resource company, is pleased to announce an update on its 10,000-tonne bulk sampling metallurgical testwork programme at the Nayega Manganese ('Mn') Project in northern Togo ('Nayega'). The bulk sampling programme is fully funded by a major producer of manganese-based alloys.

· 20tph scrubber plant commissioned and is ramping up to full capacity

o Installed mining and processing equipment at the Nayega bulk sampling site have the capacity to produce circa. 6,500 tonnes per month of +35% Mn ore

o Mining and screening phase completed with approximately 13,000 tonnes +12mm manganese already pre-screened on the scrubber plant feed stockpile

· Installation of 6km water pipeline and all water reticulation equipment completed

o The 6,500m3 lined storage dam is at full capacity. The operation is currently recovering 70% of water from plant tailings so the water balance is currently operating within design capacity

· Unsecured short-term bridge facility of £300,000 with Directors agreed on commercial terms to fund ongoing activities

Russell Lamming, Chief Executive Officer of Keras, commented, "Completing the installation of the scrubber plant and ancillary equipment with the capacity to produce circa 6,500 tonnes per month of +35% manganese ore is a major milestone for Keras. With the mining and screening phases now complete our efforts are now focussed on delivering the 10,000 tonnes of bulk sample material to the Port of Lomé in the shortest possible timeframe.

As mentioned previously the bulk sample is fully funded by a third-party major producer of manganese-based alloys without any dilution to our shareholders. In addition to the activities in Togo, the Company has been actively assessing additional value accretive investment opportunities which have required funding. The US$1,500,000 third party funding package is split into two payments of which US$750,000 has already been paid with the remainder payable when the 10,000 tonnes are ready for shipping which is expected at the end of January. This has required the Company to secure a short-term bridging facility until the Company receives the second tranche of the third-party bulk sample funding. The loan is intended to cover the costs of identifying new opportunities and project costs which are due for payment prior to receipt of the second tranche of $750,000."

"The Board of Directors have been hesitant to use equity raises to fund on-going activities as we believe Keras continues to trade at a significant discount to its underlying value - as evidenced by the fact that the last capital raising of £250,000 was over a year ago in October 2017. From a valuation perspective, excluding our West African assets the combined value of our Current Interest and Performance Shares in Calidus Resources Limited is larger than our current market capitalisation. With third party debt funding alternatives proving expensive, the Board determined that a short-term bridge facility by Directors was the most commercial option for the Company. In line with this, I would like to thank Brian and Dave for their continued support."

Loan Terms

The £300,000 loan has been provided by Non-Executive Chairman Mr Brian Moritz and Non-Executive Director Mr David Reeves. The loan is unsecured and will be repaid when the remaining $750,000 (GBP596,000) from the $1,500,000 (GBP1,191,800) third party funding package is paid. This payment is expected in February 2019 post the completion of the bulk sample. The loan will be repayable at a 4% premium on or before 30 March 2019

Related Party Transaction

The loan from Brian Moritz and David Reeves constitutes a related party transaction under the AIM Rules for Companies. Russell Lamming, a director of the Company who is independent of the Transaction, having consulted with the Company's Nominated Adviser, considers that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

**ENDS**

For further information please visit www.kerasplc.com, follow us on Twitter @kerasplc or contact the following:

Notes

Keras Resources plc is focused on building a strategic portfolio of resource assets. The Company provides investors with exposure to a portfolio of development assets, including manganese, cobalt and nickel in Togo, West Africa, and also has a significant interest in a highly prospective gold exploration and development Company in Australia, Calidus Resources Limited ('Calidus').

The Company currently holds of 458m Calidus shares ('Current Interest'), on the successful completion of the Pre-Feasibility Study at Calidus' Warrawoona gold project, an additional 265m performance shares ('Performance Shares') owned by Keras will be converted into ordinary shares of Calidus.

Keras benefits from a highly skilled management team, which has extensive operational experience in Africa and Australia with proven success in advancing assets up the value curve.