Kazera Global (AIM:KZG), a diversified commodity investment company focused on South African mineral assets, has signed a Mining Cooperation and Production Sharing Agreement between its subsidiary Whale Head Minerals (WHM) and South Africa AT Investments (SAI), a vehicle of Xiamen Antai Zirconium Co.
In London, shares climbed 12.5% to 1.35p.
The counterparty is described as China's largest integrated zirconium and titanium enterprise with reported revenues of approximately RMB2 billion (around £205 million) in its last financial year.
Under the agreement, SAI funds 100% of capital expenditure, operating costs, infrastructure and working capital across both the existing Walviskop operation and, subject to the grant of the adjacent 2A Mining Right, the broader 2A Heavy Mineral Sands project, for the life of the relevant mining rights including renewals.
WHM retains a cost-free 20% entitlement to all heavy mineral sands produced, with SAI taking the remaining 80%, and keeps full ownership of its mining rights.
An initial advance payment of US$750,000 against future sales is due within five business days of the agreement becoming effective, with a further US$1.75 million payable upon grant of the 2A Mining Right.
Diamond-bearing gravels generated as a by-product of SAI-funded mining fall outside the production sharing arrangement and remain with Kazera's diamond subsidiary Deep Blue Minerals, giving that business access to feed material without bearing the underlying mining cost.
First production under SAI's development programme is targeted by the end of 2026, with a joint mine plan, including six-month and twelve-month production targets, to be completed within 30 days of the effective date.
"We have exchanged a funding burden for royalty-like economics on an operation many times the size, while substantially transferring the funding and execution risk to a seriously resourced strategic partner," said Richard Jennings, Interim Chief Executive Officer.
The full scale of the 2A opportunity is expected to be quantified in a Competent Person's Report that Kazera says is currently in progress.
