Loan Facility - Replacement

RNS Number : 4943Q

Kazera Global PLC

28 October 2021

 

The following amendment has been made to the ' Loan Facility' announcement released on 27.10.2021 at 10:24 under RNS No 4333Q .

Volumes of Tantalum produced will increase with the aim of exceeding 10,000 kilograms per month by the end of 2022, rather than 10,000 tonnes.

All other details remain unchanged.

The full amended text is shown below .

27 October 2021

Kazera Global plc

("Kazera" or the "Company")

Loan Facility to Fund Transition Into Cash Generation

Kazera Global plc, the AIM quoted investment company, is pleased to announce new financing arrangements that will see the Company through to cash generation over the next 6 months.

Highlights

· New loan facility which will allow the Company to draw down up to £250,000 over the next 6 months

· Sums advanced by Westleigh Investments Holdings Limited to be converted into term loan on the same terms

· Deferred director salaries of more than £125,000 converted into term loans on the same basis but subordinated to the above

· Company anticipates that all its existing operations will be trading profitably prior to the end of 2021.

· It further anticipates being cash flow positive in early 2022.

· Within 6 months of the Mining Permit for the Heavy Mineral Sands operation being granted it expects to substantially boost positive cash flow generation.

· Loan facility being put in place to cover any cash flow shortfalls during the next 6 months.

The Loan Facilities

New Facility

The Company has entered into a new loan facility of £250,000 ("the New Facility")  with RiverFort Global Opportunities PCC Limited and Align Research Limited (Align").

The New Facility allows drawdowns over the next 6 months and is repayable at the end of 2022. Sums drawn down on the New Facility attract a fixed interest rate of 5% payable for the period ended 30 April 2022 and 0.5% per month thereafter until the repayment date of 31 Dec 2022. The lenders may also elect to receive this interest in new ordinary shares in the capital of the Company at a deemed price of 2p per share on the repayment date.

Director Loans

In addition, Westleigh Investments Holdings Limited (a company controlled by Giles Clarke and Nick Harrison) has agreed to formalize the arrangements pursuant to which it has financed the Company's operations over recent months into a fixed term loan of £200,0000 repayable at the end of 2022 (the "Westleigh Loan"). The Westleigh Loan ranks pari passu with the New Facility, save that any drawdowns from the New Facility cannot be used for its repayment.

Giles Clarke and Nick Harrison have also agreed that the deferred salaries owing to them of £127,493 will be converted into a fixed term loan repayable at the end of 2022 (the "Deferred Salaries"). The Deferred Salaries are on identical terms to the New Facility however are subordinated and can only be repaid once the New Facility has been repaid.

(together, the "Director Loans").

Warrant Issuance

In consideration for the lenders entering into the New Facility and the Director Loans the Company has agreed to issue warrants (the "Warrants") over:

· 28.75m new ordinary shares in the capital of the Company with an exercise price of 2 pence per new ordinary share; and

· 10.65m new ordinary shares in the capital of the Company with an exercise price of 2.7 pence per new ordinary share.

In each case, the Warrants will have an expiry date of 30 October 2023.

The Warrants will be issued as follows:

Entity	Warrants at 2p	Warrants at 2.7p
Westleigh Investments	10,000,000	3,703,702
RiverFort Global Opportunities	7,500,000	2,777,776
Giles Clarke & Nick Harrison	6,250,000	2,314,314
Align Research	5,000,000	1,851,851

The Company has also agreed to extend the exercise date of the 45,000,000 warrants exercisable at 0.3 pence per new ordinary share currently held by Align (the "Existing Warrants") from 31 March 2022 to 31 March 2023.

Forward Strategy

The Company believes that, by the end of 2021, it will have begun to trade profitably and that early in 2022 it will be cash flow positive.

The grant of the Mining Permit for HMS is also now expected before the end of the calendar year. The Company has recently been asked to provide an environmental rehabilitation guarantee, which is apparently one of the last steps prior to the Permit being granted. With the Permit in hand, the Company, as previously announced, expects within 6 months, to begin generating additional profits of up to $300,000 per month. These numbers will be improved even further by introducing a third party to build and operate a separation plant for which discussions are already underway. Simultaneously, the Company is pursuing an application for a Prospecting Right over an area which is approximately 34 times larger than the current site.

Diamond production will also increase as Heavy Mineral Sands are mined, with an estimated increase in diamond production of an additional 300ct per month and with an enhanced value of approximately $750 per carat anticipated.

In Namibia, the expectation is to export the first commercial delivery of Tantalum before the end of the year. Volumes will then steadily increase with the aim of exceeding 10,000 kilograms per month by the end of 2022.

Simultaneously, the focus will be on establishing further mineral reserves as well as on developing the Company's Lithium opportunities.

Dennis Edmonds, Kazera Chief Executive Officer, commented: 

"This New Facility, together with the conversion of the current director advances into a fixed term loan, will provide the Company with a cash buffer to overcome any short-term cash issues which might otherwise have hindered its route to profitability and cash generation.  There are a number of hurdles to jump before starting to generate serious cash flow, and we now have the resources to do that.

Generating cash from early next year will mean that we can fund our own future expansion and that we would only look to additional funding if it was on terms that substantially improved the Company's prospects.

Particularly exciting for me is the not the fact that we anticipate soon being cash generative, but that we have such enormous potential within our existing operations to build the Company into a genuine success story."

Related Party Transactions

Align is committing £100,000 to the New Facility and will be issued with 6,851,851 Warrants as described above. The Company has also agreed to extend the exercise date of the Existing Warrants. Align is a substantial shareholder in the Company and therefore a related party pursuant to Rule 13 of the AIM Rules for Companies.

Together Westleigh, Giles Clarke and Nicholas Harrison will be committing an aggregate of £327,493 to the Company pursuant to the Director Loans. Westleigh, Giles Clarke and Nicholas Harrison will also be issued with an aggregate of 22,268,016 Warrants as described above. Westleigh is ultimately owned by Giles Clarke and Nick Harrison who are directors of the Company. Accordingly, Westleigh, Giles Clarke and Nicholas Harrison are related parties of the Company pursuant to Rule 13 of the AIM Rules for Companies.

The independent directors of Kazera, having consulted with the Company's Nominated Adviser finnCap, consider that the entry into the New Facility with Align, the Directors Loans with Westleigh, Giles Clarke and Nicholas Harrison, the issuance of Warrants to each of those parties and the extension to the Existing Warrants are fair and reasonable insofar as the Company's shareholders are concerned.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No. 596/2014 ('MAR').

For further information on the Company, visit:  www. kazeraglobal .com

Kazera Global plc (c/o Camarco) Dennis Edmonds (CEO)	Tel: [phone]
finnCap (Nominated Adviser and Joint Broker) Christopher Raggett / Charlie Beeson (corporate finance)	Tel: [phone]
Camarco (PR) Gordon Poole / James Crothers / Hugo Liddy	Tel: [phone]

**ENDS**

 

END

 

 

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