TIDMKZG
RNS Number : 4333Q
Kazera Global PLC
27 October 2021
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 GBP250,000 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 GBP125,000 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 GBP250,000
("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
GBP200,0000 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 GBP127,493 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 tons 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 GBP100,000 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 GBP327,493 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) Tel: +44 (0)203 757 4980
Dennis Edmonds (CEO)
finnCap (Nominated Adviser and Joint Broker) Tel: +44 (0)207 220 0500
Christopher Raggett / Charlie Beeson (corporate
finance)
Camarco (PR)
Gordon Poole / James Crothers / Hugo Liddy Tel: +44 (0)20 3781 8331
**ENDS**
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October 27, 2021 05:24 ET (09:24 GMT)
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