Kazera Global Regulatory News (KZG)

 30 September 2021

Kazera Global plc

("Kazera" or the "Company")

Whale Head Minerals Acquisition - Completion of Cash Generative Heavy Mineral Sands Project

Kazera Global plc, the AIM quoted investment company, is pleased to announce that, further to previous announcements, it has agreed with Tectonic Gold PLC to acquire a 60% controlling stake in Whale Head Minerals (Pty) Ltd ("WHM"). A consideration of $250,000 of Kazera ordinary shares will be paid for the 60% share in WHM which owns two Heavy Mineral Sands ("HMS") opportunities in the Port Nolloth/ Alexander Bay area of South Africa. The JORC compliant Walviskop project being acquired is expected to bring near term cashflow within 6 months of a Mining Permit being granted over a 5Ha beach sand deposit at Walviskop.

Highlights

· Kazera will acquire 60% of WHM (10% will be retained by Tectonic and 30% is held on trust for future Black Economic Empowerment Partners).

· Price to be satisfied by the issue of $250,000 worth of Kazera Ordinary shares at the volume weighted average price for 30 days (1.358 pence) preceding 28 September 2021. The number of shares being issued is 13,527,957. These shares will be locked in for a period of 1 year.

· Acquisition brings near term cash flow with the Company aiming, within 6 months of the Mining Permit being granted, to produce circa 6,000 tons of HMS per month, achieving an estimated gross profit of in excess of $300,000 per month based on current prices.

· WHM is awaiting the final grant of a Mining Permit over 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% of ROM) and Ilmenite (27.54% of ROM).

o Also present are Zircon and Rutile which have not been included in the modelling.

o NPV of approximately £150 million (applying a 20% discount rate) based on current FX rates.

· WHM is also in the process of applying for a Prospecting Right over an adjacent beach which appears to share similar characteristics to Walviskop and which is approximately 34 times larger.

· Establishment costs of operation are anticipated to be covered by increasing production from Kazera's diamond and tantalum mining businesses.

· Potential partners have already been identified to build a Processing Plant on site - at their own cost,which will improve beneficiation and profitability.

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 get permission to mine them. However, conversely, the density of the HMS makes it prohibitively expensive for diamond miners to extract diamonds. With Deep Blue 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 notes 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 also ensures that rehabilitation is constantly carried out.

Forward Strategy

WHM are currently awaiting the grant of a Mining Permit over the 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 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% of ROM) and Ilmenite (27.54% of ROM) predominate, with some Zircon (1.2% of ROM) and some Rutile (0.92% of 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 $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. A combined Life of Mine of in excess of 25 years is forecast.

Simultaneously, the intention is to co-operate with an independent third party to build and operate a plant at its own cost to separate out the various component minerals, which will considerably increase profitability to WHM without increasing overhead.

In addition, and, as a byproduct of the HMS operation, Deep Blue Minerals now expect 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 $250 per carat, whereas the Company confidently expects these diamonds to exceed a price of $750 per carat.

Muisvlak Plant ("the Plant")

Kazera and MV5 are delighted to report that the Plant started operating on the 28th of this month, ahead of schedule. The intention is to operate the Plant for a week in order to process the majority of the contractors' gravels and meet the auction cut-off date of 1 October 2021. The Plant will then be closed for a week to consolidate operating conditions. This will assist contractors in getting their gravels processed but will also allow the necessary refurbishment of the Plant to take place.

Ordinary Shares in Issue

Application has been made to the London Stock Exchange for the 13,527,957 new Ordinary Shares to be admitted to trading on AIM and admission is expected to occur on or around 8.00am 5 October 2021. The new Ordinary Shares will rank pari passu with the existing Ordinary Shares in issue.

Total Voting Rights

Following Admission, the issued share capital of the Company will be 723,295,609 Ordinary Shares and this figure may be used by shareholders as a denominator for the calculations by which they will determine if they are required to notify their interest in or change to their interest in the Company under the Disclosure Guidance and Transparency Rules published by the UK Financial Conduct Authority. There are no Ordinary Shares held in treasury and each Ordinary Share entitled the holder to a single vote at general meetings of the Company. Therefore, the total number of voting rights in the Company will be 723,295,609.

Dennis Edmonds, Kazera Joint Chief Executive Officer, commented: 

"The next few months will be revolutionary for the Company. With the Company on the verge of bringing its diamond and Tantalum operations into profitable production, now is the perfect time to bring the HMS project on board. We have worked very closely with Tectonic who have done a great job in adverse circumstances to progress the Mining Permit and the Prospecting Right. With the Mining Permit expected to be issued before the end of the year and the Prospecting Right lodged, we are now moving forward with negotiations with potential partners on setting up an HMS Separation Plant.

"The intention has always been to use diamond production as a means of funding future developments and it is very exciting for the Kazera Board to see the whole plan now starting to come together."

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No. 596/2014 ('MAR').

For further information on the Company, visit: www.kazeraglobal.com

**ENDS**