Aim-listed investment company Kazera Global has said that aggregate proceeds of $4.2-million (about N$79 million) have been received to date from China-linked Hebei Xinjian Construction in respect of the sale of African Tantalum (Aftan), in Namibia.
In December, Kazera announced that it had signed a definitive agreement to sell its 100% interest in African Tantalum (Aftan) to Hebei Xinjian Construction (Xinjian) for US$13 million (N$244 million).
The sale of Aftan – which is the holding company for Kazera’s interest in the Tantalum Valley mine, in Namibia – comprised a purchase consideration of US$3.64 million and the repayment of an intercompany loan to Kazera of US$9.36 million.
PAYMENT TERMS
Business Express understands that in December 2022 only US$642 207 had been paid by Xinjian, while another US$500 000 was paid before the end of December.
A further US$2.5-million was paid by the end of January 2023. The balance of US$9.36-million was segmented payable in equal monthly instalments starting in April 2023 and terminating in December this year.
Outstanding amounts will attract interest at a rate of 8% a year.
When approached by Xinjian to consider the outright sale of Aftan in place of a previously announced investment, Kazera’s board carefully considered the merits of an earlier-than-initially-anticipated exit from this investment.
NOBLE SALE
Kazera’s board believe the sale of Aftan offers the company an opportunity to exit an investment for an attractive return, enabling Kazera to invest in its diamond and mineral sands projects – the latter of which offers a significant cash flow profile and now without the need to raise additional capital.
It also positions Kazera to return value to shareholders, and the board is examining options to enable this in the future.
In addition, the sale removes the risks associated with the construction of a new processing plant and recommissioning the mine in the current uncertain market environment.
Kazera CEO Dennis Edmonds at the time of the deal said that the company has been working with Xinjian under the joint venture since last July and is confident in its ability to progress the asset through its next development phase, while Kazera retains exposure to its growing cash flow profile through the debenture stream.
“This represents a real milestone for Kazera as the first realisation of returns from an investment in line with our stated strategy as an investing company of building value in our investments whilst maintaining flexibility for opportunistic exit points. This strategic exit will also enable management to focus on our existing projects and further potential investments.
“We see major opportunities in the present environment and look forward to delivering sustainable growth to the benefit of all our stakeholders in the near term,” he said.
DOING WELL IN SOUTH AFRICA
Currently, Kazera Global continues to make progress at both a corporate and operational level, and of particular importance is the increased cooperation and positive relationship between Kazera’s subsidiaries and Alexkor RMC joint venture (JV), as it works together to create job opportunities for the Richtersveld community in South Africa, CEO Dennis Edmonds said last week in a corporate and operational update.
The Alexkor RMC JV is a JV between Alexkor and the Richtersveld Mining Company, a company formed to represent the interests of Alexkor and the Richtersveld community.
Further, strategic shareholder African Mineral Sands Singapore (AMS) bought a further tranche of Kazera’s ordinary shares from an existing shareholder, triggering the transfer of voting rights to AMS over 29.9% of the company’s ordinary shares currently in issue.
“The completion of the acquisition of a further tranche of Kazera shares by AMS is also a significant, positive development for Kazera.
“AMS now holds voting rights through shares it has acquired to date, and via agreements with Catalyse Capital and its related parties, of more than 29.9% of the shares in the company. Kazera has already begun exploring potential new investment opportunities put forward to the company by AMS,” Edmonds outlines.
The pilot plant at Whale Head Minerals, in Walviskop, is said to show very promising heavy mineral sand (HMS) results with sample and test results forming the basis for informed strategic discussions with potential offtake partners, Kazera says.
HMS samples indicate the presence of higher-value minerals including rutile, zircon and monazite. Samples are identified to have raised levels of radioactivity and the company has engaged with the National Nuclear Regulator to determine whether any specific permitting is required.
“Whilst the presence of radiation in HMS samples may be seen by some as an issue, it is a situation that is not uncommon in the HMS sector and has, equally importantly, helped highlight the presence of higher value minerals in our HMS samples.
“The detailed baseline study that has been conducted and other associated work will allow us to seek clarification on permitting, as well as tailor our operations and inform our approach to environmental management and rehabilitation,” Edmonds outlines.
“While on a basic level any delay is frustrating, the testing and sampling work we have undertaken has highlighted the economic case for separation as it will ultimately result in the sale of higher value HMS constituents, rather than a lower price for the basic HMS product.
“We will ensure we use the time (whilst gaining clarification from the relevant authority) to continue with the procurement of equipment, site preparation and construction, and in progressing discussions with potential offtake partners, so that we put ourselves in the strongest possible position for the commencement of HMS sales,” he adds.
HEBEI XINJIAN
HeBei Xinjian Construction CC was established in August 2013 in Namibia, but its parent company, HeBei Xinjian Construction Group, was founded in July 1952.
The companies’ core business has been housing construction, decoration, industrial and civil equipment installation, plumbing, electrical and instrument installation, real estate development, overseas project contracting, labour export, import, and export trading.
It has been reported that HeBei Xinjian is seeking to expand its offtake deals in Namibia’s Tantalite Valley in the //Kharas region after offering a letter of intent to Arcadia Minerals Ltd to negotiate sales for tantalum pentoxide and lithium oxide from the Swanson tantalum/lithium project.
The Swanson mine, under licence 223, is in the Tantalite Valley area, about 30km south of the Warmbad settlement at Karasburg East.
Arcadia Minerals Ltd is an Australian company with exploration interests in Namibia, where it owns tantalum, lithium, nickel, copper and gold projects.