LONDON (ShareCast) - (Sharecast News) - Investment company Kazera Global announced the conditional acquisition of a controlling interest in a near-term producing diamond mine, and in a heavy mineral sands opportunity, in South Africa on Thursday.
The AIM-traded firm said it would acquire a 90% stake in Deep Blue Minerals (DBM), and a stake in Whale Head Minerals (WHM).

It said the acquisition cost of the stake in DBM was £0.6m, funded by the issue of 120,000,000 ordinary shares to Richard Jennings, at a price of 0.5p each.

Kazera said it was looking at near-term diamond production via DBM, noting historical production grades of 10 carats per hundred tons, producing more than 10 million carats of gem grade diamonds since production began in 1928.

It said its timeline to restart production and generate revenue was 12 following completion, adding that the acquisition had inferred mineral resources of 208,000 carats, at a grade of six carats per 100 square metres.

On the potential acquisition of a stake in WHM, Kazera said it would acquire 90% of its current issued share capital, or another percentage as available, once all necessary arrangements with Black Economic Empowerment partners under South African law are in place.

It said it would assume $0.5m of liabilities from the vendor of the shares in WHM, subject to the completion of certain milestones, which would be satisfied through the issue of shares at the volume-weighted average price at the time those milestones are met.

Completion remained subject to the receipt of a "satisfactory" competent persons' report and receipt of a mining permit over heavy mineral sand deposits in the area known as Walviskop.

Looking at the heavy mineral sands potential, Kazera said the work programme would be funded by diamond production revenue, and would aim to produce more than 6,000 tonnes per month, achieving an estimated gross monthly revenue of $0.6m.

A possible partner had been identified to build a processing plant on site at their own cost, the board said, which would "greatly improve" the profit targets of the heavy mineral sands.

"With high growth potential and near-term revenue opportunities, leveraging on our board expertise and flexibility, this investment is typical of the value we seek to create at Kazera," said chief executive officer Larry Johnson.

"We are investing in a ready built team with bespoke experience for the geology on the licence.

"Kazera will be taking a majority interest in the joint venture, and expects to enjoy near term revenue generation which will be a significant boost to our company, and will facilitate not just growth at our South African diamond and heavy mineral sands fields but also at TVM, where we continue to unearth value."

At 1028 BST, shares in Kazera Global were down 13.04% at 0.5p.

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