Marula Mining
PLC
(“Marula’’ or the
“Company”)
1
March 2024
Marula to Invest in Kenyan Manganese Mining
Operation
Issue of
Equity
Marula Mining (AQSE: MARU) an African focused mining
and development company, is pleased to announce that the Company
has signed a binding terms sheet (“Term Sheet”) with Kenyan
manganese mine operator Gems and Industrial Minerals Limited
(“GIM”) for a commercial interest in the Larisoro Manganese Mine
located in Samburu County in Northern
Kenya (the
“Mine”).
The Larisoro Manganese Mine is a conventional and
shallow open pit mine which commenced operation in 2012 and has
operated intermittently over the past 12 years on two granted and
adjoining mining permits. Mined manganese ore has ranged from
18.82% manganese (“Mn”) to up to 55.01% Mn and has averaged 33.41%
Mn over the past 6 years and which is crushed and screened to
produce a +37.00% Mn saleable product that has historically been
sold into the Asian
markets.
On signing the Term Sheet, consideration of £300,000
became payable to GIM to be satisfied through the issue of
2,400,000 new ordinary shares in the Company at a price of 12.5p
per new ordinary
share.
The Term Sheet provides that subject to GIM entering
into a Technical Support Agreement (“TSA”) and a Commercial
Agreement (“CA”) Marula will provide investment of US$1,500,000 for new mining, crushing, screening
and processing equipment (the “Investment”) to increase monthly
manganese ore production to between 5,000 tonnes and 10,000 tonnes
of saleable high-grade manganese ore over the next 3 to 6 months.
The TSA and CA are expected to be signed in mid-March
2024.
On signing the TSA and CA, the Company has agreed to
pay GIM and its nominees a sum of £200,000 to be satisfied in new
ordinary shares or in cash. A further £300,000 will be payable to
GIM on completion of the initial exploration program and a final
payment of £750,000 will become payable on achieving 50,000 tonnes
of commercial sales of manganese
ore.
Furthermore, the Term
Sheet provides that Marula will be granted an option (exercisable
for 12 months following the signing of the TSA and the CA) to
increase its commercial interest in the Mine to 70% through a
further payment to GIM of £1,250,000 in cash or shares, at the
Company’s election.
The Company has already completed a detailed due
diligence work program. This work has confirmed the
potentially high-grade nature of the manganese mining operation,
with independent assay and export reports confirming the high-grade
nature of the manganese, the established mining and processing
operations, and the opportunity to materially expand production to
the initial targeted levels through major investment in new mining
and processing
equipment.
Highlights:
-
Marula to invest in an established manganese mining
operation in northern Kenya and
secure an initial 60% commercial interest with an option to
increase to
70%
-
The investment further strengthens Marula’s expanding
operational and development stage battery metals portfolio in
Southern and East
Africa
-
The current operation consists of 3 shallow open pits
that extend over a cumulative length of approximately 600m and which have mined the highly visible and
outcropping surface manganese mineralisation by conventional drill
and blast and load and haul open pit mining operations down to very
shallow depths of between 1.5m and
12m
-
Site inspections by the Company’s technical team of
the current open pit operations indicates that the manganese
mineralisation appears to remain open down-dip and along
strike
-
Current processing equipment crushes and screens the
run-of-mine ore to +60mm sizing and targets production of +37% Mn
saleable product – which is considered the benchmark medium-grade
product in the international markets – and which the current mine
operators have sold into the Asian markets with exports through
port facilities at
Mombasa
-
Analyses of historical testwork and assays of mined
material at the Larisoro Manganese Mine between 2018 and 2024 have
indicated that mined manganese ore has ranged from 18.82% Mn to up
to 55.01% Mn and averaged 33.41%
Mn
-
Samples taken by the Company from the open pit mining
operations in December 2023 and
independently assayed by a European based commodity trading group,
returned results of 37.61% Mn, 36.16% Mn and 39.38% Mn and averaged
37.72% Mn and also reported very low and very attractive iron
grades of below 2.00%
Fe
-
Further samples are currently being taken at the
Larisoro Manganese Mine by the Company’s geological team and are to
be sent to South Africa in
March 2024 for metallurgical analyses
and testing to determine the ability to further upgrade the
manganese ore from 37% Mn to up to a high-grade 44% Mn saleable
product
-
In addition to the manganese mineralisation,
high-grade coltan, columbite-tantalite mineralisation has also been
reported with assay reports indicating grades of 43.7%
Na2O5 and 35.9%
Ta2O5
-
Total costs at the Larisoro Manganese Mine are
reported by GIM as being US$77/tonne
of saleable product and including all mining, processing and
logistics and sales costs and compare very favourably to the
current Manganese Ore Index 37% Mn FOB Port Elizabeth price which
is US$3.91 per dry metric tonne unit
(“DMTU”)
-
The Company now proposes to complete a major
investment into the Larisoro Manganese Mine
to increase monthly production to an
initial 5,000 tonnes and 10,000 tonnes of a saleable
high-grade, up to 44% Mn, manganese ore
through investment under the TSA and CA in new mining
and processing equipment, a broad exploration program and through
new mine planning and addition of new and experienced technical
personnel
-
Initial investment of approx US$1.5 million in new mobile mining equipment and
new processing equipment is now planned to be completed into GIM by
the Company and which will include a new primary jaw crusher, screens and
associated conveyors, and two new excavators, three loaders and two
articulated dump trucks that are considered sufficient to achieve
the initial expanded targets and are capable of achieving
production rates necessary to take the operation through to up to a
25,000 tonnes of monthly
production
-
The investment in new mobile mining and processing
equipment and upgrades and expansion is to commence in March 2024 and the Company is currently
finalising the acquisition and transportation of the new mining and
processing equipment following meetings held by the Company’s CEO
with a number of equipment suppliers in Johannesburg earlier this
week
-
In parallel with the investment in the mining and
processing operation, the Company will now commence a
further investment of approx US$1.75
million in an initial exploration program to be completed
over the course of 2024 and that is aimed at increasing the
understanding of the broader extent and characteristics of the
manganese mineralisation at the
Larisoro Manganese
Mine
-
This work will immediately focus
on establishing the down-dip and strike length
continuity of the manganese mineralisation beyond what is currently
seen in the open pits and in surface
outcrops, and which will include ground magnetic work,
trenching and sampling and to also include exploration and resource
drilling, upon which the Company’s aims to better understand the
scalability of the Larisoro Manganese Mine in order build a much
longer-term and sustainable manganese mining and processing
operation
-
The Company can also confirm that it is in advanced
discussions with a European based commodity trading group in
respect to the offtake and marketing of 100% of the production of
saleable manganese ore. This group has already independently tested
the manganese ore from the Larisoro Manganese Mine on behalf of the
Company in December 2023, has
completed a site visit in February
2024 and is an established purchaser and exporter of
manganese ores in East Africa
through its port facilities here in the
region
-
Following signing of the binding terms sheet, the
Company and its lawyers have commenced formal documentation of the
TSA and CA, and which is expected to be completed in mid-March
2024
-
Under the terms of the Company’s proposed investment
to GIM and to the Larisoro Manganese Mine, Marula has secured a 60%
commercial interest by agreeing to
fund 100% of all working
capital and development costs to increase production to between
5,000 tonnes and 10,000 tonnes of saleable manganese ore over the
next three to six months. This includes the funding of the new
mining and processing equipment and completion of the planned
exploration
program
-
The Company will also
issue to GIM or its nominees, ordinary shares to the value of
£300,000 on signing of the binding terms sheet at a price of
12.5 pence per share. Additional
deferred payments are to be made to GIM in cash or in shares at the
Company’s election, with a £200,000 payment due
on execution of formal TSA
and CA documents, £300,000 on completion of the initial exploration
program and a final payment of £750,000 on achieving 50,000 tonnes
of commercial sales of manganese
ore.
-
The Company has also
agreed, if necessary, to guarantee up to KES
70,000,000 (approximately £376,000) of GIM’s existing indebtedness,
which GIM is to repay immediately from its attributable cashflow
from operations at the Larisoro Manganese
Mine
-
Marula also has a 12-month
option to increase its commercial interest to 70% through a further
payment to GIM of £1,250,000 in cash or shares, at the Company’s
election
-
Based on the Company’s
preliminary economic analyses, payback in full of its investment in
GIM and Larisoro Manganese Mine and 60% commercial interest, is
projected to be achieved within the first 12 to 15 months of
operations
About the Larisoro
Manganese Mine
The Larisoro Manganese Mine
commenced operation in 2012 and has operated
intermittently over the past 12 years on two granted and adjoining
mining
permits.
Geologically it is located within the Proterozoic
Mozambique mobile belt, in the portion which lies to the east of
the East African Rift
Valley.
The manganese ore body is considered to be
structurally controlled with both hydrothermal and terrestrial
input set in a transgressive and regressive continental shelf
environment. Historical regional mapping indicates that the
manganese mineralisation is found in the faulted contact zone
between quartz-felspar granulites and leucocratic biotite gneiss
and extends for over
5km.
The operations at the Larisoro Manganese Mine have
historically been limited by inefficient mining and processing
activities, aged and poorly maintained equipment, and a lack of
geological understanding and modern mine
planning.
Sales and exports of manganese ore have been made by
GIM into the Asian markets with exports made through port
facilities at
Mombasa.
Historical Assay and
Export Results 2018 to
2024
Sample and Export
Number |
MnO Grade |
Mn Grade |
Mn_20180405 |
35.32% |
27.35% |
Mn_20190321_1 |
24.04% |
18.63% |
Mn_20190321_2 |
32.68%% |
25.33% |
Mn_20190912 |
70.98% |
55.01% |
Mn_20190912_1 |
53.48% |
41.45% |
Mn_20190912_2 |
51.01% |
39.53% |
Mn_20201109 |
58.58% |
45.40% |
Mn_20210211 |
64.87% |
50.27% |
Mn_20210526 |
27.37% |
21.21% |
Mn_20211129 |
38.99% |
30.22% |
Mn_20220222 |
56.17% |
43.53% |
Mn_20220411 |
51.23% |
39.70% |
Mn_20220712 |
63.55% |
49.25% |
Mn_20230615 |
49.18% |
38.11% |
Mn_20230615_1 |
34.35% |
26.62% |
Mn_20230615_2 |
34.97% |
27.10% |
Mn_20230615_3 |
35.60% |
27.59% |
Mn_20230615_4 |
38.96% |
30.19% |
Mn_20230615_5 |
25.37% |
19.66% |
Mn_20240118 |
24.28% |
18.82% |
Mn_20240118_1 |
53.28% |
41.29% |
Mn_20240118_3 |
24.28% |
18.82% |
Independent Sample Assays
from Marula Due Diligence
Review
Sample
Number |
Fe Grade |
Mn Grade |
Meru - 001 |
1.97% |
36.17% |
Mn_20190321_1 |
1.99% |
37.61% |
Mn_20190912 |
2.05% |
39.58% |
Admission
Application has been made
for the 2,400,000 to be admitted to trading
on the Aquis Stock Exchange Growth Market on or around 8 March 2024 (“Admission") and will rank pari
passu with the ordinary shares of the Company in
issue.
Total voting
rights
Following Admission, the
Company's issued share capital will comprise 173,530,403 ordinary
shares of 0.01p each, with each share carrying the right to one
vote, therefore the total number of voting rights in the Company
will be 173,530,403. This figure may be used by shareholders as the
denominator for calculations by which they will determine if they
are required to notify their interest in the Company, or a change
to their interest in the Company, under the Financial Conduct
Authority's Disclosure Guidance and Transparency
Rules.
Jason Brewer, Marula
Mining PLC CEO,
said:
“Following a successful
sit visit we made late 2023, and a very thorough technical
assessment and review, we are very confident about this investment
in GIM and the Larisoro Manganese
Mine.
“With its historical
high-grade assays, production history, established operations,
existing stockpile of material, and the interest we have already
received for offtake and marketing of the planned increased
manganese production, we are pleased to proceed with this
investment, which we believe is firmly in line with our strategy
here in Kenya and East Africa and firmly in the battery metals
sector.
“This marks our first
investment in Kenya’s mining sector and is ahead of its planned
dual listing on the Nairobi Securities Exchange which the Company
anticipates completing in due course. This is an important
milestone for us, as we continue to establish Marula Mining to be
an African focused mining and development company in the battery
metals sector.
“We are excited to get
started with our investment in new mining and processing equipment
and an exploration strategy which we hope will materially expand
the operation and manganese resources. A considerable amount of
work is to now commence and I look forward to updating shareholders
on the progress we make with GIM and their progress at Larisoro
Manganese Mine.”
Makena Mwiraria, Director
Gems and Industrial Minerals Limited,
said
“We are thrilled to have
Marula invest and support our manganese mining and processing
activities. I am also proud that this is Marula's first entry into
Kenya's mining sector. This is a
transformative transaction for us and the manganese mining
operations.
“As we progress this with
Marula, we look forward to maximising the potential that we believe
we have here for all involved in the operation and for the broader
benefit of the local communities and
businesses.
“As part of Marula's
investment, we look forward to the arrival of the new mining and
processing equipment to increase production, as well as new mine
planning and the addition of experienced technical personnel to see
the project advance further.
“This partnership with
Marula signifies a new chapter of growth, innovation, and
collaboration for our company and the Larisoro Manganese
Mine."
Review of Announcement by
Qualified Person
This announcement has been
reviewed by Mr Jacques Perold
(PrSciNat, MGSSA, MIQ MSc(Eng), MSc(ESPM), NDSURMA, Datametrics),
who is engaged by Marula Mining plc as its professional consulting
geologist.
Mr Jacques Perold is a professional geologist with
37 years of experience in the field and extensive knowledge of all
aspects of mineral resource
management.
Mr Jacques Perold is Member of the Geological
Society of South Africa (No.
965505) and a registered scientist of the South African Council for
Natural Scientific Professions (Reg No. 400171/05) in terms of
section 20(3) of the Natural Scientific Professions Act, 2002 (Act
27 of 2003) in the field of Geological Science (Professional
Natural Scientist).
The Directors of Marula are responsible for the
contents of this announcement.
This announcement contains inside information
for the purposes of UK Market Abuse
Regulation.
About Marula
Mining
Marula Mining (AQSE: MARU) is an African focused
battery metals investment and exploration company and has interests
in several high value mine projects in Africa;
the Blesberg Lithium and Tantalum Mine and Korridor
Lithium Project in South Africa, the Kinusi Copper
Mine, the Nyorinyori Graphite Project, the NyoriGreen
Graphite Project and the Bagamoyo Graphite
Project all in Tanzania and the Nkombwa Hill
Project in Zambia. As we advance operations at these
battery metals focused projects, Marula will continue to build and
expand its interests in other high-quality projects
in Africa.
Marula’s strategy is to identify and invest in
advanced and high-value mining projects throughout East, Central
and Southern Africa that the Directors believe would
deliver returns for its shareholders. The Board and management team
aims to establish Marula as a socially and environmentally
responsible, sustainable, and profitable producer of critical
metals and commodities that are of increasingly strategic
importance to modern technologies and the global
economy.
Marula’s shares are traded on the AQUIS Stock
Exchange (AQSE), Marula is exploring opportunities to admit
its shares to trading on the London Stock Exchange plc’s
Standard List Market, Kenya’s Nairobi Securities Exchange and
South Africa’s Johannesburg Stock
Exchange.
For enquiries
contact:
Marula Mining
PLC
Jason
Brewer, Chief
Executive
Officer
Faith Kinyanjui
Mumbi, Investor
Relations
|
Email :
jason@marulamining.com
Email :
info@marulamining.com |
AQSE Corporate
Adviser
Cairn Financial Advisers
LLP,
Liam Murray / Ludovico
Lazzaretti
|
+44 (0)20 7213 0880 |
Broker
Peterhouse Capital Limited,
Charles Goodfellow / Duncan
Vasey
|
+44 (0)20 7469
0930 |
Financial PR and
IR
BlytheRayTim
Blythe / Megan Ray / Said
Izagaren
|
+44 (0)20 7138 3204 |
Caution:
Certain statements in this
announcement, are, or may be deemed to be, forward looking
statements. Forward looking statements are identified by their use
of terms and phrases such as ''believe'', ''could'', "should"
''envisage'', ''estimate'', ''intend'', ''may'', ''plan'',
''potentially'', "expect", ''will'' or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward-looking statements are not based on
historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements reflect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors.