London-listed Marula Mining has agreed to a deal to acquire a 60 percent stake in a manganese mining operation in Samburu County from local operator Gems and Industrial Minerals Limited (GIM) via cash and share swaps worth up to Sh280.2 million (£1.55 million).
Marula signalled its intention to enter the Kenyan mining sector a year ago when it hired PricewaterhouseCoopers Kenya (PwC Kenya) as a transaction, legal and tax advisor to guide local acquisitions and potential dual listings of the company’s shares on regional stock exchanges.
The Africa-focused battery metals investment and exploration company has interests in several mine projects in Africa; Blesberg Lithium and Tantalum Mine in South Africa, Nkombwa Hill Project in Zambia and Kinusi Copper Mine and Bagamoyo Graphite Project in Tanzania.
New regulatory filings say that it has made an initial payment of £300,000 (Sh54.2 million) to GIM, settled by an allotment of 2.4 million shares in the company after the parties signed a binding terms sheet.
GIM will receive a further £200,000 (Sh36.15 million) in shares or cash once the parties sign technical support and commercial agreements later this month.
The signing of the two agreements will also trigger an investment of £1.5 million (Sh271 million) by Marula for new mining, crushing, screening and processing equipment to increase monthly production of high-grade manganese ore to between 5,000 tonnes and 10,000 tonnes over the next three to six months.
“A further £300,000 will be payable to GIM on completion of the initial exploration programme and a final payment of £750,000 (Sh135.6 million) will become payable on achieving 50,000 tonnes of commercial sales of manganese ore,” said Marula in the regulatory filings published by the London Stock Exchange.
Marula has also been granted an option to raise its stake in the venture to 70 percent twelve months after signing the technical support and commercial agreements—for a consideration of £1.25 million (Sh226 million), which would raise the entire cost of acquisition and investment to Sh777.2 million.
Ahead of its investment, the company says it has hired two additional geologists to support its team at Larisoro Manganese Mine in Samburu County, and a community relations and development manager.
