Kazera Global Regulatory News (KZG)

4 August 2014

Kennedy Ventures plc

Acquisition of Tantalum Mine in Namibia

Kennedy Ventures plc ("Kennedy Ventures" or "the Company") is pleased to announce the signing of a conditional agreement for the acquisition of 75% of African Tantalum (Pty) Limited ("Aftan") for a total consideration of R12m (£0.66m), R4m (£0.22m) of which will be satisfied through the issuance of 4,523,113 Ordinary Shares in Kennedy Ventures at a price of 4.9p per share, (average closing price over 15 days up to and including 31 August 2014) and the remainder through a loan of R8m (£0.44m), (the "Transaction"). The 75% stake of Aftan, a Namibian incorporated investment vehicle, is being acquired from a group of private investors.

Aftan has signed a conditional agreement with Magnum Mining and Exploration Limited ("Magnum") to acquire 60% of the Tantalite Valley Project ("TV Project") in Namibia, a mine which it is intended will be brought back into production of tantalite, used in the production of tantalum, within six months of completion of the Transaction.

Demand for Tantalum

The principal demand for tantalum is from the electronics industry, where tantalum capacitors are used in electronic equipment such as mobile phones, tablets, laptop computers and video game systems. In addition, tantalum is used to produce a variety of super alloys which can be used to manufacture high temperature cutting tools and other applications where its high melting point and corrosive resistant properties are required.

Tantalum has a very high melting point and has exceptional heat conducting capabilities. Tantalite ore, 30% Ta2O5, trades at US$207/kg currently, whilst the high grade 99.8% Tantalite trades at US$420/kg.

In August 2012, the US Securities and Exchange Commission adopted a rule mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act to require companies reporting to the SEC to publicly disclose the origins of the tantalum they buy in order to restrict the use of conflict minerals that originated in the Democratic Republic of the Congo or an adjoining country. As a result, users of tantalum are encouraged to demonstrate that their supply chain is transparent to ensure that conflict-free tantalum is procured.

It is intended that the tantalum produced by Aftan would be conflict-free and the Company would anticipate that a premium to tantalum from conflict areas could therefore be charged.

Background to TV Project

The TV Project is located approximately 14km north of the Orange Riverwhich forms the border between

South Africa and Namibia. Approximately 90km north of Tantalite Valley is the town of Karasburg in Namibia.

This town lies on a main tarred road and railway line linking South Africa with Namibia.

The name Tantalite Valley is derived from the high-grade tantalite occurring in various pegmatite ore bodies that outcrop in this mountainous area of southern Namibia.  Tantalum minerals occur within carbonatite and alkaline rocks known as pegmatites, the most important mineral being tantalite (Fe,Mn). The mineralised pegmatites which occur at Tantalite Valley are found within the mining licence area which is some 452.7 hectares in extent.

Historical Data and Development plan

Extensive work including diamond and reverse circulation drilling, pitting and trenching as well as metallurgical test work has been undertaken on the Tantalite Valley pegmatite's in the past, this work has indicated an insitu pegmatite tonnage in excess of 2 million tons. Due to logistics and pricing constraints in the past, very little commercial mining has been undertaken. Aftan is reviewing the geological models upon which the insitu pegmatite tonnage is based together with all the other historical information and will publish the results of the review once it has completed it. In the interim Aftan's development plan has been reviewed by Mr Peter Price PrEng a Consulting Mining Engineer with extensive experience in mining pegmatites. Mr Price is of the opinion that the development plan is realistic.

Transaction conditions

Aftan will assume responsibility for funding and operating the TV Project and has an assignable, 100% interest in any revenues generated by the TV Project in the 30 months following completion.

Completion of the Transaction is conditional, inter alia, upon:

· Confirmation of mining tenure at the TV Project. Magnum has been advised that the Namibian Minister of Mines and Energy is conducting a review of the TV Project's mining licence as part of a broad-reaching review of mining tenure in Namibia generally.

· In-country regulatory approvals being made. Magnum is currently taking local law advice on the Namibian regulatory approvals that may be required in order to complete the Transaction (if any).

· Each of the conditions to the Transaction must be satisfied or waived by 31 December 2014 or such later date agreed by Magnum and Aftan.

Giles Clarke, Chairman of Kennedy Ventures said:

"This is the first step in our intention to build Kennedy Ventures into a Namibian based producer of the highest grade of tantalum, which when certified, is a highly valuable commodity given its use in nearly every modern electronic device. Its origin matters to end users such as the world's large electronics companies due to their desire to comply with the US regulations on the use of tantalum. We intend to build upon this initial mine and utilise wide ranging international financing options to create significant value for shareholders in a fully integrated business."

Ends