Aim-listed Kazera Global has executed a definitive settlement agreement with Hebei Xinjian Construction in respect of a previously announced arbitration award concerning African Tantalum (Aftan), the company’s former tantalum and lithium mining business in Namibia.

Under the terms of the settlement agreement, Hebei is required to make an initial $500 000 cash payment to Kazera, following which the settlement agreement will become effective in accordance with its terms.

The payment is expected to be made from Namibia, and the parties are currently working through the associated banking and exchange-control mechanics required to enable the funds to be remitted to Kazera.

Under the agreement, Kazera will receive $10.5-million, payable over a structured period ending December 2029, with enhanced downside protections and an option for accelerated settlement.

Hebei will also withdraw its review application in respect of the original arbitration proceedings.

As previously announced, Kazera entered into a share sale and loan repayment agreement with Hebei in December 2022 in respect of Aftan.

Following material payment defaults by Hebei, Kazera started arbitration proceedings in Namibia. On May 7, 2025, Kazera announced that an arbitration award had been granted substantially in the company’s favour, awarding it about $11.9-million, plus continuing interest and costs.

Kazera has previously received about $4.1-million from Hebei under the original transaction which, together with the $10.5-million settlement consideration, provides a contractual pathway to aggregate cash receipts of about $14.6-million.

This compares favourably with the original fixed cash consideration under the 2022 Aftan sale agreement of about $13-million, Kazera points out.

Hebei may settle early at a discounted amount of $9-million if paid in full by December 31 this year.

Kazera says the settlement provides a structured alternative to the arbitration award and recovery process which, while strongly supported legally, carries inherent uncertainty in timing, cost and practical enforcement.

The board currently intends, subject to legal, tax, working capital and regulatory considerations, to seek to return about 80% of net cash proceeds received under the settlement to shareholders.

The initial $500 000 cash payment, once received, is expected to materially reduce the company’s near-term external funding requirements, strengthen working capital flexibility and allow management to remain focused on the continued ramp-up of Kazera’s subsidiary Whale Head Minerals (WHM), the Rare Earth Minerals International (REMI) partnership and advancement of the 2A mining right.

WHM entered into a binding 50:50 production sharing agreement with South African mineral processing group REMI in relation to the Walviskop heavy mineral sands project, in South Africa’s Northern Cape province, in May.

“This is a significant and highly positive milestone for Kazera and its shareholders. We have executed a definitive settlement agreement in respect of the Aftan arbitration, which provides a clear pathway to significant further value recovery,” interim CEO Richard Jennings says.

”While we remained highly confident in our legal position, the board has always been focused on achieving the best practical commercial outcome for shareholders. We believe this agreement provides enhanced certainty, meaningful downside protection and an attractive commercial outcome when balanced against the uncertainty, timing and cost associated with alternative recovery routes,” he explains.

Jennings points out that the settlement is consistent with the board’s broader strategy of transitioning Kazera towards a disciplined investment company model focused on value creation, monetisation and capital discipline.

“This settlement, alongside the REMI processing agreement and the final push to secure the key 2A mining right, is further evidence that the new board is delivering at pace, drawing a line under legacy issues and the failures of previous management, and focusing on accelerated monetisation of the company’s valuable assets.

“We now turn to completing and publishing the Competent Persons Report on 2A in the near term,” he informs.