Kazera Global, the AIM-quoted investment company, has announced that its South African subsidiary, Whale Head Minerals (WHM), has entered into a long-term Mining Cooperation and Production Sharing Agreement with South Africa AT Investments (SAI) establishing a fully funded strategic partnership for the development of the company’s flagship Heavy Mineral Sands (HMS) project.
Highlights
- Targeted step-change in production scale: Production targets will be set through a comprehensive Mine Plan within 30 days of the Effective Date. Subject to the grant of the 2A Mining Right, WHM’s cost-free 20% entitlement alone is expected to materially exceed the total production levels previously targeted for Walviskop.
- Mining and processing operations fully funded by SAI: SAI will fund 100% of the capital expenditure, operating costs, infrastructure, equipment deployment and working capital required for the operations covered by the Agreement, materially reducing Kazera’s ongoing funding requirements.
- Near-term cash inflow: initial advance payment of US$750,000 against future sales, payable within five Business Days of the Agreement becoming effective.
- Further US$1.75 million cash inflow on 2A grant: second advance payment against future sales payable upon the grant of the 2A Mining Right.
- First production targeted by end of 2026: SAI intends to commence implementation immediately, with first production under its development programme targeted by the end of 2026 and WHM’s 20% production entitlement accruing from commencement of production.
- Cost-free 20% exposure to HMS production: WHM retains entitlement to 20% of all physical HMS products produced, without contributing to the associated capital expenditure or mining and processing operating costs, with SAI entitled to the remaining 80%.
- Potential step-change in DBM economics: SAI-funded HMS mining is expected to generate diamond-bearing gravels as a by-product of the mining operation. Those gravels and any recovered diamonds are excluded from the SAI production sharing arrangements and remain for the account of DBM.
- Major, well-resourced Chinese industrial partner: SAI is part of a major Chinese industrial group specialising in zirconium and titanium raw materials and downstream processing, with reported FY2025 revenues of approximately RMB2 billion (c. £205 million) and substantial existing production capacity across zircon sand, zirconium silicate and related value-added products.
- Fully funded pathway to industrial-scale development: the Agreement provides a funded route from the existing Walviskop operation to the future large-scale development of the broader 2A Mining Right area following grant.
- Life-of-mine partnership: Agreement covers both the Walviskop and 2A Projects for the life of the relevant mining rights, including any renewals and extensions.
- WHM retains ownership of its mining rights and permits, together with ultimate regulatory responsibility for the mining operations, including local community and government relations and securing necessary mining licences.
- Generational asset potential: the Board believes the Agreement establishes the framework for the long-term development of an industrial-scale HMS operation capable of supporting production for many decades.
Richard Jennings, Interim Chief Executive Officer of Kazera Global plc, commented: “This is the most significant agreement in Kazera’s history, and the culmination of months of work including visiting the Group’s operations in Xiamen. Seeing first-hand the sheer scale of its zirconium and titanium processing operations gave us considerable confidence in its ability to develop our HMS assets at industrial scale, while the depth of HMS expertise within the SAI team addresses the operational constraints that have held WHM back in recent years.
“The economics for Kazera are transformational and fundamentally different from a conventional production sharing agreement. SAI funds 100% of the capital investment, mining and processing operating costs, infrastructure and working capital required to develop the operation at scale, while WHM retains 20% of all HMS products produced for the life of mine, at no capital or operating cost to us and with no dilution for shareholders.
“Detailed production targets will be agreed with SAI within 30 days, but, subject to securing the 2A Mining Right, the intended scale is of a completely different magnitude to anything previously contemplated for WHM. Once scaled, we expect WHM’s 20% cost-free entitlement alone to materially dwarf the total production levels previously targeted at Walviskop. Put another way, if SAI delivers the scale of operation envisaged, the whole of our previous production ambition could ultimately look little more than a rounding error by comparison.
“In effect, 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. There is a further benefit for our diamond business: as a by-product of the same SAI-funded mining activity, DBM is expected to receive diamond-bearing gravels without bearing the underlying cost of mining them which, we believe, can materially transform the economics of that business.
“Subject to the grant of the 2A Mining Right, we believe we have secured the framework for a generational mining asset capable of producing at industrial scale for many decades. Our immediate focus is now on completing the Competent Person’s Report on 2A, which we expect will demonstrate just how large this opportunity is.”
A spokesperson for the Board of SAI commented: “We are highly enthusiastic about finalizing this production partnership with Whale Head Minerals at the Walviskop project. By combining our specialized primary extraction capabilities and wet magnetic separation technology with WHM’s high-grade asset base, we have established a highly efficient operational framework. We are entirely focused on accelerating commercial volume output to unlock immediate, long-term value for both companies as we build a transparent and mutually beneficial operation.”
Geoff Eyre, Chairman of Kazera Global plc, commented: “Richard has worked tirelessly in the interests of all Kazera’s Shareholders since stepping into the Interim CEO role to achieve this pivotal announcement for Kazera which sets Whale Head Minerals on the path of industrial scale production, with zero dilution to shareholders, in a very short space of time following the board restructuring in April this year.
“We welcome our new partners SAI and look forward to supporting their aggressive development plans and to benefitting from what is effectively a 20% free carried interest in the revenues generated from the WHM asset for the life of mine.”
Overview
SAI is a subsidiary of Xiamen Antai Zirconium (Xiamen Antai) a division of a major Chinese industrial group (specialising in the extraction, production and deep processing of zirconium and titanium raw materials and zirconium silicate. The Company is advised the Group is China’s largest comprehensive enterprise in this sector and generated revenue of approximately RMB 2 billion (circa £205 million) in FY2025.
The Agreement is expected to transform the revenue potential of Kazera’s HMS assets by providing a fully funded pathway to industrial-scale production. SAI will fund 100% of the capital expenditure, mining and processing operating costs, infrastructure, equipment deployment and working capital required to develop the operations at scale, while WHM retains a continuing 20% entitlement to HMS production. This gives Kazera exposure to a potentially much larger, long-life production base without being required to fund the capital and operating costs of the mining and processing operations covered by the Agreement.
The intended scale of the development is of a completely different order to that previously contemplated for the existing Walviskop operation. Specific production targets will be established through a comprehensive Mine Plan to be prepared jointly by WHM and SAI within 30 days of the Effective Date, including targets on a 6-month, 12-month and ongoing basis. The Board expects that, as operations scale, WHM’s cost-free 20% production entitlement alone has the potential to materially exceed the total production levels previously targeted by WHM. The full industrial-scale development opportunity is linked to the grant of the 2A Mining Right.
In addition, the SAI-funded HMS mining operations are expected to generate diamond-bearing gravels as a by-product of production. Those gravels and any recovered diamonds remain outside the SAI production sharing arrangements and for the account of DBM, meaning that DBM is expected to receive diamond-bearing feed material without bearing the underlying cost of mining that material.
The Agreement establishes a funded long-term development framework for WHM’s existing Walviskop mining operations and, following the anticipated grant of the adjacent 2A Mining Right, the future large-scale development of the broader 2A Heavy Mineral Sands Project (the “2A Project”). The Agreement is for both the Walviskop and 2A Project life of mine, including any renewals and extensions. As such, the Board believes this Agreement provides the foundations for the establishment of an industrial scale HMS production facility for many decades and has the potential to become a generational mining asset.
