Final Results

7 August 2023

Marula Mining plc

(“Marula” or the “Company”)

Final Results for the year ended 31 December 2022

Marula Mining (AQSE:MARU), an African focused mining and development company, announces its results for the year ended 31 December 2022.

Summary Financial Statements are set out below. A full copy of the audited Annual Report will be available shortly on the Company's website, www.marulamining.com and will be posted to shareholders in due course.

Highlights

• Jason Brewer appointed as Director and Chief Executive Officer, and Marcel Nally appointed as Non-Executive Director. The new Board implemented its new battery metals investment strategy in Africa, as well as effected the Company’s change of name to Marula Mining plc. Subsequent directorate changes and strengthening of the Board was announced in the post period
• Heads of agreement to acquire the Blesberg Lithium and Tantalum Project (“Blesberg”) in South Africa and the Nkombwa Hill Tantalum, Rare Earth Elements and Phosphate Project (“Nkombwa Hill”) in Zambia
• Bulk sampling program on the lithium spodumene stockpiles and metallurgical testwork were completed at Blesberg. High-grade assay results obtained from Blesberg showed an average grade of 6.10% Li2O. Following this, site works commenced
• US$5 million Lithium Prepayment facility secured for Blesberg
• Board approved accelerated program to fast-track the treatment of the high-grade lithium identified at Blesberg following the commencement of processing and production of high-grade lithium stockpiles
• Comprehensive site visit conducted at Nkombwa Hill, with niobium and tantalum mineralisation samples collected
• Marula entered into a binding heads of agreement with Takela Mining Tanzania (“Takela”) to secure a 49% commercial interest in the Kinusi Copper Project (“Kinusi”) which was subsequently increased to a 75% interest in the post period
• Site visit to Kinusi revealed high-grade copper mineralisation and further indicates the potential that the Directors believe exists there
• Marula entered into a binding heads of agreement with Kusini Gateway Industrial Park Limited to secure 73% commercial interest in the Bagamoyo Graphite Project (“Bagamoyo”)

Post Period Highlights

• Marula announced its intention to seek a listing of its ordinary shares on the AIM market of the London Stock Exchange
• Marula plans to seek an additional listing of its shares on the Johannesburg Stock Exchange
• Appointment of PWC Kenya as Advisor on East African transactions
• Phase 1 exploration activities commenced at Bagamoyo, and preliminary results of the activities observed two graphite trends
• New equipment arrived at Blesberg to double capacity to move stockpiled ‘run-of-mine’ material
• 6,500 tonnes of material were processed from existing stockpiles at Blesberg
• Exploration work commenced at Kinusi and copper ore processing activities advanced
• Increased commercial interest in Kinusi to 75%
• Independent consultants confirmed the presence of a copper mineralised corridor at Kinusi
• Marula entered into a binding heads of agreement with Takela to secure 75% interest in the Nyorinyori Graphite Project (“Nyorinyori”)
• High-grade graphite mineralisation and the presence of jumbo graphite flakes were observed on the granted mining licenses, during a technical site visit to Nyorinyori
• Establishment of an investment and co-development partnership with Q Global Commodities, conditional upon, amongst other things, a Rule 9 Waiver being obtained in accordance with the City Code on Takeovers and Mergers and shareholder approval at a forthcoming general meeting of the Company.
• Mr Tokkas Van Heerden appointed as Chief Operating Officer
• Establishment of Muchai Mining Zimbabwe and Muchai Mining Kenya operating subsidiaries

During the year ended 31 December 2022, the Company incurred costs to Gathoni Muchai Investments Limited (“GMI”), a company in which Jason Brewer (CEO of the Company) is a director and substantial shareholder, in relation to exploration, office rental, PR services, legal services and travel re-imbursements. A portion of these costs were attributable to the Heads of agreement to acquire the Blesberg and Nkombwa Hill projects and were settled in accordance with those terms through issues of equity to GMI. The remaining outstanding balance of approximately £127k was paid in cash by the Company to GMI (the “Cash Transaction”). The Cash Transaction constitutes a related party transaction under Rule 4.6 of the AQSE Growth Market Access Rulebook.  The Directors of the Company independent of the Cash Transaction confirm that, having exercised reasonable care, skill and diligence, the Cash Transaction is fair and reasonable insofar as the shareholders of Marula are concerned.

The independent audit report draws attention to note 1 in the financial statements, which indicates that the Group will need to raise additional funds to maintain sufficient cash flows. As stated in note 1, these events or conditions, along with other matters as set forth in note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. The auditor's opinion is not modified in respect of this matter.

Whilst acknowledging this material uncertainty, the directors consider it appropriate to prepare the consolidated financial statements on a going concern basis for the following reasons:

• The Group has commenced mining and processing operations at Blesberg and is forecasting positive operating cashflow to be generated from that project in 2023;
• The Group has commenced mine development and processing plant construction for Kinusi and is forecasting positive operating cashflow to be generated from that project in 2023;
• The Group has received committed funding from Q Global Commodities of £2,250,000 to fund future exploration activities and corporate working capital requirements. This amount is sufficient to cover all budgeted discretionary expenditure;
• The Group has secured additional discretionary funding from Q Global Commodities for a further £1,500,000 that has been allocated towards additional exploration and development activities at Blesberg and at Kinusi and at the Bagamoyo and Nyorinyori Graphite Projects;
• The Group’s Board of Directors have significant experience in the debt and equity capital markets and specifically have a successful track record in funding mining operations, new mine development and exploration activities and are further considered capable of securing ongoing debt and equity capital financing for the Group.

Jason Brewer, CEO, said:

“Marula has experienced significant development during 2022. In particular, Blesberg continued to prove its worth with initial exciting assay results indicating high-grade lithium spodumene, which is why during the period the Board approved the acceleration of the program to fast-track the treatment and production of high-grade lithium product from the existing historic stockpiles.

“The Kinusi Copper Mine also showed incredible potential both during the period and post period. Following a site visit with Takela Mining, geological sampling programs were carried out. With the post period exploration works at Kinusi confirming the existence of a copper corridor, we believe that the project has the potential to be the second producing mine in the Company’s portfolio. As such we are particularly looking forward to updating shareholders on Kinusi.

“Post period, Marula saw the expansion of its activities to Zimbabwe and Kenya through the establishment of Muchai Mining Zimbabwe and Kenya. Through this, the Company was able to demonstrate the strength of its new battery metals investment strategy, a strategy we believe will yield great opportunities in the critical minerals sector.

“We are particularly excited by our intention to float Marula’s shares on the AIM market of the London Stock Exchange, which will provide the Company with exposure to a more diverse range of shareholders. Additionally, as our presence in Southern Africa increases, the Company believes that it is in its best interest to seek a listing on the Johannesburg Stock Exchange.

“We are delighted that our partnership with Q Global Commodities continues to strengthen, and that their support in the Company is a boost in the acceleration of development for our portfolio. The value of the partnership was best displayed when Q Global helped secure new mining equipment for the Blesberg project. I look forward to continuing the partnership as we move forward with the development of Blesberg.

“I would like to thank the team of Marula and its shareholders for an incredible year and the development and expansion the Company has experienced. I look forward to seeing what we can accomplish in 2023.”

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.

For enquiries contact:

Marula Mining PLC Jason Brewer, Chief Executive Officer Faith Kinyanjui Mumbi Investor Relations	Email : [e-mail] Email : [e-mail]
AQSE Corporate Adviser Cairn Financial Advisers LLP, Liam Murray / Ludovico Lazzaretti	[phone]
Broker Peterhouse Capital Limited, Charles Goodfellow / Duncan Vasey	[phone]
Financial PR and IR BlytheRay Tim Blythe / Megan Ray / Said Izagaren	[phone]

Forward looking statements

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.

STRATEGIC REPORT

REVIEW OF THE BUSINESS – Chairman’s Statement

2022 represented a period of rapid growth for the Group. The drive, capital raising and deal generation of CEO Jason Brewer has allowed significant opportunity for the Group and this will be reflected in the 2023 performance and growth. We continue to make progress with the acquisition of near-producing and advanced battery metals assets. Jason and Marc formally joined the Board in March 2022, and the Group immediately identified a number of exciting near term producing assets which we developed throughout 2022, and continue to do so in 2023, creating a portfolio approach to the battery and energy metals sector Lithium production from Blesberg is proof of this strategy’s success and Marula Mining’s capabilities.

Considerable progress has been achieved on multiple fronts since the formation of the new Board and management team, as well as strong “on the ground” partnerships in Southern Africa, as seen by our partnerships with Q Global Commodities and Takela Mining Tanzania.

With extensive experience, the Board has directed its focus on battery metals acquisitions and implemented future growth plans. This included robust operating procedures, policies and practices, numerous cost cutting exercises, key advisor reviews, and a detailed desktop and on-site evaluations of a number of investment opportunities.

Our ambition during the period was to advance the development of Marulas projects, in particular the exploration and mine development initiatives at the Blesberg Lithium and Tantalum Mine. The development of the Kinusi Copper Project and our Tanzanian graphite projects are of particular interest to the board. We are proud to have made significant progress in the development of Blesberg to becoming the producing project it is today.

Marula Mining has made considerable progress at the Blesberg Lithium and Tantalum project. The lithium sampling and metallurgical test work that took place during the period identified high-grade lithium mineralisation (5-7% Li2O) and with further testing completed was exemplified post period, where samples from Blesberg produced high-grade lithium in spodumene which was a significant step toward our overall goal of making better financial returns and economic benefits for shareholders and all stakeholders.

During the year, we continued our strategy and acquired an interest in the Kinusi Copper Mine (“Kinusi”) in Tanzania. We believe that Kinusi has the potential to be the Group’s second operating mine. We also progressed our partnership with Tanzanian Group Takela Mining and have engaged with key government and local officials. Toward the end of 2022, we continued to realise our strategy with by securing an interest in the Bagamoyo Graphite Project (“Bagamoyo”). This further exhibited the Group’s focus on supporting the global transition to clean energy and clearly outlines Marula’s growing position in the battery metals sector, as well as our ambitions to build our business here in Africa. We continue to progress exploration across these exciting projects during 2023.

In the post period, we continued to strengthen our focus on battery metal acquisitions, as per our strategy. In February 2023, the Group acquired a majority commercial interest in the Nyorinyori Graphite Project in Tanzania, increased our holding in the Kinusi, and expanded our scope of potential projects to include lithium and copper in Zimbabwe and Kenya through the establishment of Muchai Mining Kenya Limited and Muchai Mining (Pvt) Limited subsidiaries.

A further significant development that occurred post period was the partnership with Q Global Commodities (QGC). The investment agreement entered into with QGC provides Marula Mining with technical, financial and strategic support to accelerate development of the Group’s current portfolio of mining projects in Africa. As announced in January 2023, the investment agreement, along with the co-development and relationship agreements entered with QGC, are conditional upon, amongst other things, a Rule 9 Waiver being obtained in accordance with the City Code on Takeovers and Mergers and shareholder approval at a forthcoming general meeting of the Company. Both the Company and QGC are still progressing the various submissions to regulatory bodies in the United Kingdom and in South Africa with their respective advisers to obtain the necessary outstanding approvals.

Throughout the year, Directors have been mindful of their obligations under S172 of the Companies Act 2006. S172 sets out a number of principles the Board should refer to in promoting the success of the Group for the benefit of shareholders. The Board have complied with this requirement as follows:

Principle	Group’s actions
Have regard to the likely consequences of any decision in the long term.	The Board has considerable experience in this regard, with clear processes and procedures in place, and with added input sought from key advisors when required.
Have regard to the interests of the Group's employees.	The Group does not currently have any employees.
Have regard to the need to foster the Group's business relationships with suppliers, customers and others.	The Group’s key relationships are with its suppliers, advisors and other service providers. The Group has always worked closely with stakeholders and sought to treat them fairly with due respect.
Have regard to the impact of the Group’s operations on the community and the environment.	This is one of the Group’s core values, however the Group’s operations are currently limited and so too its impact on the community and environment.
Have regard to the desirability of the Group maintaining a reputation for high standards of business conduct.	As a Group listed on AQUIS Stock Exchange Growth Market, it is seeking opportunities to further its principal activity. The Group and Board maintain high standards when dealing with potential investment opportunities.
Have regard to the need to act fairly between members of the Group.	The Group has a diverse shareholder base and the Board ensure that no one member’s interests take priority over another.

FINANCIAL OVERVIEW

The results for the 12-month period to 31 December 2022 shows a loss after taxation of £596,799 (2021: £287,782).

The basic loss per share from continuing operations was (5.836p) (2021: loss per share of 0.01p).

The Directors do not recommend the payment of a dividend.

PRINCIPAL RISKS AND UNCERTAINTIES FACING THE GROUP

With the new strategy of the Group pursuing opportunities in the natural resources sector, especially in Africa and battery metals, the Board regularly reviews the risks to which the Group is exposed and endeavours to minimise them as far as possible. The following summary, which is not exhaustive, outlines some of the risk and uncertainties facing Marula Mining:

Inability to Fund Operations Post-Acquisition

The Group may be unable to fund the operations post acquisition of the target business if it does not obtain additional funding, however, it will ensure that appropriate funding measures are taken to ensure minimum commitments are met.

Risk Inherent in an Acquisition

Although the Group and the Directors will evaluate the risks inherent in a particular target, they cannot offer any further assurance that all of the significant risk factors can be identified or properly assessed. Furthermore, no assurance can be made that an investment in Ordinary Shares in the Group will ultimately prove to be more favourable to investors than a direct investment, if such an opportunity were available, in a target business.

KEY PERFORMANCE INDICATORS

Appropriate key performance indicators will be identified in due course as the new business strategy is implemented in pursuing opportunities in the natural resources sector, along with ensuring the availability of working capital for the Group, which was achieved during the year through the raising of net proceeds through the issue of 32,014,500 ordinary shares raising net proceeds of £694,252.

OUTLOOK

To rapidly grow the Group’s investments within the battery and energy metals sectors, the Board has decided to focus its efforts on progressing immediate critical mineral production opportunities currently available within Southern Africa by utilising their considerable collective experience in these commodity and geographical areas. The initial focus on lithium / tantalum in South Africa and niobium / tantalum / rare earths in Zambia which aim to create early stage cashflow and the continued project development are just the start of the Group’s evolution. Marula has acquired interests in several further projects, and has established a significant presence in Tanzania with three of its projects. In accordance with the Group’s focus on rapidly growing its operations, Marula Mining established the Muchai Mining subsidiaries in Zimbabwe and Kenya to identify near-producing critical mineral assets. As such this expansion of our operations aligns seamlessly with our new strategy.

Marula Mining continues to evaluate new opportunities of near-producing or advanced assets, in accordance with the Group’s focus on a battery and energy metals portfolio, a strategy which has proven itself, rapidly growing Marula Mining. As already demonstrated through Blesberg, which continues to produce lithium spodumene.

We are pleased with the progress of our three projects in Tanzania, in particular our binding heads of agreement with Kusini Gateaway Industrial Park Limited where we secured a 73% commercial interest in the Bagamoyo Graphite Project. By doing so we strengthened the Group’s position in Tanzania’s growing graphite exploration and mining sector. With Phase 1 exploration work completed, recommendations are being reviewed for the planned Phase 2 program, which is to include drilling and additional trenching and sampling work. We look forward to progressing with the development of Bagamoyo.

In February 2023, Marula Mining increased its commercial interest in Kinusi from 49% to 75% after several site visits by the Group’s Board which confirmed high-grade copper mineralisation, and the potential that the Directors believe exists at Kinusi. As such, Marula Mining plans to install a copper processing plant at the Kinusi. We believe Kinusi could be the Group’s second operating mine. The potential of the project is further displayed by our attempts to progress the negotiations for an initial copper offtake agreement for the sale and purchase of all copper and precious metals products that are produced from the project, with samples being sent for assay testing and analysis as part of optimisation test work.

In February 2023, Marula entered into a binding heads of agreement with Takela, securing a 75% commercial interest in the Nyorinyori Graphite Project. High-grade mineralisation has been observed at the mining licence and has increased our confidence in the project. We are now committed to an accelerated exploration program which will include further mapping and sampling as well as a maiden shallow drilling program. As announced 4 April 2023 Negotiations have commenced with Takela to increase the scope of the project to include an additional 25 granted mining licences on top of the 10 mining licences granted from the initial binding heads of agreement. 

As Marula begins to expand and advance its projects and interests in Southern Africa, Marula is exploring opportunities to admit its shares to trading on AIM, the market operated by the London Stock Exchange Group plc. An AIM listing would provide the Group with new opportunities to raise capital to continue to progress the Group’s portfolio of projects.

I would like to take this opportunity to thank my fellow Board members, all of whom have worked relentlessly, as well as our loyal shareholders and our advisers for their continued support and patience. I look forward to seeing what Marula can achieve in 2023 and updating shareholders and stakeholders on further progress the Group makes.

Richard Lloyd

FIMMM FGS

Chairman

3 August 2023

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2022

	2022		2021
	£		£
Administrative expenses	(595,858)		(287,792)
Depreciation	(1,364)		-
Loss from operations	(597,222)		(287,792)
Finance income	196		10
Loss before taxation	(597,026)		(287,782)
Income tax expense	227		-
Loss for the year	(596,799)		(287,782)
Other comprehensive income
Other comprehensive losses	(5)		-
Total comprehensive loss for the year	(596,804)		(287,782)
Loss per share expressed in pence per share
Basic	(5.83)		(0.01)
Diluted	(5.83)		(0.01)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED 31 DECEMBER 2022

	2022	2021
	£	£
NON-CURRENT ASSETS
Property , plant & equipment	23,429	-
Exploration expenditure	1,184,479	-
Goodwill	1,269,176	-
	2,477,084	-
CURRENT ASSETS
Trade and other receivables	472,096	20,106
Cash and cash equivalents	100,316	144,521
	572,412	164,627
TOTAL ASSETS	3,049,496	164,627
EQUITY   ISSUED CAPITAL AND RESERVES
Issued share capital	918,431	762,183
Share premium	2,512,048	2,050,994
Other Reserves	835,830	774,131
Foreign currency reserve	(5)	-
Accumulated losses	(4,175,819)	(3,579,020)
TOTAL EQUITY	90,485	8,288
CURRENT LIABILITIES
Trade and other payables	2,750,184	156,339
Borrowings	208,827	-
	2,959,011	156,339
TOTAL EQUITY AND LIABILITIES	3,049,496	164,627

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2022

		Issue Capital	Share Premium	Other Reserves	Foreign Currency reserve	Accumulated Losses	Total   Equity
		£	£	£	£	£	£
At 1 January 2021		599,333	1,900,529	772,481	-	(3,291,238)	(18,895)
Profit for the year		-	-	-	-	(287,782)	(287,782)
Total comprehensive loss for the year		-	-	-	-	(287,782)	(287,782)
Shares issued during the year		162,850	162,850	-	-	-	325,700
Cost of issue of shares		-	(10,735)	-	-	-	(10,735)
Warrants issued		-	(1,650)	1,650	-	-	-
Total transaction with owners		162,850	150,465	1,650	-	-	314,965
Balance at 31 December 2021		762,183	2,050,994	774,131	-	(3,579,020)	8,288

At 1 January 2022		762,183	2,050,994	774,131	-	(3,579,020)	8,288
Profit for the year		-	-	-	-	(596,799)	(596,799)
Other comprehensive income		-	-	-	(5)	-	(5)
Total comprehensive loss for the year		-	-	-	(5)	(596,799)	(596,804)
Shares issued during the year		156,248	763,101	-	-	-	919,349
Cost of issue of shares		-	(302,047)	-	-	-	(302,047)
Warrants issued		-	-	61,699	-	-	61,699
Total transaction with owners		156,248	461,054	61,699	-	-	679,001
Balance at 31 December 2022		918,431	2,512,048	835,830	(5)	(4,175,819)	90,485

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2022

		2022				2021
	£			£
CASH FLOWS FROM OPERATING ACTIVITIES
Total Loss	(596,799)			(287,782)
Adjustments for:
Depreciation	1,364			-
Interest receivable	(196)			-
Foreign exchange	34,569			-
Movement in SMP receivable	(744,820)			-
Movement in deferred income	2,178,074			-
Changes in working capital:
Decrease /(increase) in trade and other receivables	8,725			(13,726)
Increase / (decrease) in trade and other payables	7,765			52,744
Income tax expense	(227)			-
CASH FLOW  FROM / (USED IN) OPERATING ACTIVITIES	888,455			(248,764)
NET CASH FLOWS FROM INVESTING ACTIVITIES
Exploration expenditure 1	(247,272)			-
Purchase of tangible fixed assets	(24,793)			-
Investment in subsidiary	(1,537,500)			-
Cash on acquisition	1,455			-
Interest received	196			-
NET CASH FLOWS FROM INVESTING ACTIVITIES	(1,807,914)			-
NET CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issue of shares	537,893			314,965
Net proceeds from the issue of    warrants	61,699			-
Proceeds from shares yet to be issued	97,495			-
Proceeds from convertible loan note	178,167			-
NET CASH FLOWS FROM FINANCING ACTIVITIES	875,254			314,965
Movement in cash for the year	(44,205)			66,201
Cash and cash equivalents brought forward	144,521			78,320
CASH AND CASH EQUIVALENTS AS AT 31 DECEMBER	100,316			144,521

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