Aim-listed Kazera Global has agreed to acquire additional interests in Whale Head Minerals (WHM) and Deep Blue Minerals (DBM), the company’s South African heavy mineral sands and diamond interests respectively, from PDNA Property Investments, for R973 374, or about $60 000, in cash.

The purpose of the transaction is to increase Kazera’s stake in WHM, simplify the ownership structures of Kazera’s South African investments and preserve the rights of employees and local communities, the company says.

Under the terms of the share purchase agreement entered into between Kazera and PDNA, Kazera will acquire the 21 ordinary shares currently held by PDNA in WHM, representing 21% of WHM’s issued share capital, plus six ordinary shares currently held by PDNA in DBM, representing 6% of DBM’s issued share capital.

From the total cash consideration, R811 145 ($50 000) is allocated to the WHM shares and R162 229 ($10 000) is allocated to the DBM shares. Payment will be made from Kazera’s existing cash resources.

Completion is expected to take place in the coming days following execution of the relevant transfer and associated documentation and payment of the consideration.

Following completion, Kazera’s legal interest in WHM will increase from 70% to 91%, of which 79% will be for the benefit of Kazera.

Of the remaining 12% interest in WHM, 5% will be held for the benefit of employees, 5% for the benefit of relevant local communities and 2% for the benefit of a third party.

Kazera will make formal arrangements to ensure the shares held for the benefit of others are held in an appropriately governed manner in due course, the company assures shareholders.

Kazera already holds a 100% direct interest in DBM, of which 74% is currently held for the benefit of Kazera and 26% is held on behalf of black economic empowerment (BEE) partners.

Following completion of the acquisition of PDNA’s 6% DBM interest, Kazera’s beneficial interest in DBM will increase from 74% to 80%, with the remaining 20% continuing to be held on behalf of BEE partners.

The board believes the transaction further simplifies the ownership structure of Kazera’s South African investments and better aligns the company’s interests in WHM and DBM as it continues to focus on progressing its heavy mineral sands and diamond interests.

AFTAN SETTLEMENT
Meanwhile, further to the company’s announcement in June regarding the settlement agreement entered into in relation to African Tantalum (Aftan), Kazera has seen a payment instruction from China for the $500 000 due to its subsidiary from Hebei Xinjian Construction.

Kazera says it is in contact with the relevant parties and advisers in Namibia to facilitate receipt of the funds as soon as possible.

“Although this is a modest transaction, this is strategically very important for Kazera. It further simplifies the ownership structure around our South African assets and increases Kazera’s beneficial interest in DBM,” Kazera interim CEO Richard Jennings says.

“Importantly, it also gives Kazera legal title to a further 21% of WHM, while preserving the existing underlying arrangements in favour of employees, the local community and another third party.

“. . . I intend to put in place the appropriate legal structure of title for these entities in the very near term so that they can benefit directly from the continuation of the sea change that is occurring in regard to the trajectory of our flagship South Africa heavy mineral sands asset,” he adds.

“Our focus remains on bringing discipline, alignment and commercial momentum to our South African assets, particularly as we continue to progress WHM’s heavy mineral sands operations and DBM’s diamond interests.

“We also remain focused on completing the process for receipt of the initial Aftan settlement payment. While this has taken longer than originally anticipated due to exchange control and banking procedures, we understand that the process continues to progress. Based on our ongoing engagement with Hebei and the documentation received to date, we remain confident that the payment will be made and will update shareholders once funds have been received,” Jennings avers.