Aim-listed Kazera Global has signed a binding heads of terms with Great Lakes Graphite to acquire 71% of its share capital for a total consideration of £750 000 to be paid in three stages.

This will provide the company exposure to three highly prospective exploration licences in Kenya.

Great Lakes fully owns the three licences covering the Homa Bay and Buru Hill rare earth projects.

Kazera says at-surface mineralisation on the licences presents favourable conditions for economic recovery.

Great Lakes is undertaking a scoping study and will also publish a mineral resource estimate within the next six months.

Thereafter the licences will undergo a low-impact work programme to progress to a definitive feasibility study, which will cost about $2.5-million and take 24 to 30 months to complete.

Historic data estimates the resource to contain 65 000 t of cerium, 52 000 t of lanthanum and 18 000 t of neodymium, assuming a recovery rate of 50% of the top 50 m layer of the resource.

"With our diamond operation already in production, tantalum about to come on stream and the expected imminent resolution of the issues around our heavy mineral sands licence, the company will soon have three separate revenue streams.

“This acquisition represents an exciting new opportunity for our company to use its increasing cash flow to deliver material growth and a step-change in outlook for our shareholders,” states Kazera CEO Dennis Edmonds.

As part of the transaction, Kazera will also grant an option to Caracal Investments (CI) to acquire 20% of Great Lakes Graphite for $1-million. This option period will run for 18 months from the period of execution.

Assuming the exercise of the option, the shareholding of Great Lakes Graphite will comprise 51% for Kazera, 20% for CI and 29% for current shareholders.

If CI does not exercise the option, the current shareholders in Great Lakes Graphite can take over the option on the same terms.