UK-based investment company Kazera Global has signed an agreement to acquire a 71% stake in Canadian industrial minerals company Great Lakes Graphite.
Great Lakes Graphite fully owns three exploration licenses covering the Homa Bay and Buru Hill Rare Earth Elements projects in Kenya.
The licences that cover a total area of 346km2 are located close to each other and established rail and road transport links and large towns in the country.
Under the agreement, Kazera will pay an aggregate consideration of £750,000, in three stages, in exchange for 71% interest in Great Lakes Graphite.
It will pay £250,000 in the first tranche, at a price of 1.5p per share, and £250,000 in the second tranche at 2.5p per share, upon completion of the Definitive Feasibility Study (DFS).
The company will pay £250,000 in the third tranche, at a price of 2.5p per share, following the announcement of initial ore production.
Kazera said that the transaction is in line with its strategy to invest in companies and projects in Africa within the mining and resource sectors.
Kazera chief executive officer Dennis Edmonds said: “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.”
Kazera is responsible for funding the identified exploration milestones and leading to a DFS unto its completion and pursuing a mining license for the project.
A licence area in Buru Hills, which has seen the majority of the historical work, holds a JORC compliant exploration target of 27Mt at a grade of 1.89% total rare earth elements.
The company intends to fund the technical milestones, which may cost up to $2.5m and require 24 to 30 months, through its existing cash flows.
As part of the transaction, Kazera holds the right to allow Caracal Investments (CI) to acquire 20% of Great Lakes Graphite for a total consideration of $1m.
Upon exercising the option, Great Lakes Graphite will be owned by Kazera with a 51% stake, CI with a 20% and current shareholders with a 29% stake.
