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Marula makes maiden investment in Kenya to acquire a 60% interest in manganese mine

Manganese

Manganese

Photo by Creamer Media

1st March 2024

By: Marleny Arnoldi

Deputy Editor Online

     

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Battery metals miner Marula Mining has signed a binding term sheet with Kenyan manganese mine operator Gems and Industrial Minerals (GIM) to acquire a 60% commercial interest in the Larisoro mine, in Samburu Country, Kenya.

The shallow openpit Larisoro mine started operating in 2012, with manganese ore grades having ranged from 18.82% to 55% between 2018 and 2024, with 33.41% being the average.

The mine currently crushes and screens ore to produce a 37% manganese saleable product that is mostly sold to Asian markets.

The term sheet provides that, subject to GIM entering into a technical support agreement and commercial agreement, Marula will invest $1.5-million in buying new mining and processing equipment for the mine.

Marula expects the equipment to help the mine increase its production to between 5 000 t and 10 000 t of saleable high-grade manganese ore over the next three to six months.

The company expects the additional agreements to be signed in mid-March.

On signing the term sheet, a consideration of £300 000 became payable to GIM, which Marula will provide through the issue of 2.4-million new ordinary shares to the company.

On signing of the technical support and commercial agreements, Marula will pay GIM £200 000 in cash or shares, as well as a further £300 000 on completion of an initial exploration programme.

A final payment of £750 000 will become payable once the mine achieves sales of 50 000 t of manganese ore.

Moreover, the term sheet provides a 12-month option for Marula to increase its commercial interest in the Larisoro mine to 70% through the payment of £1.25-million in cash or shares, at Marula’s election.

Marula has already completed a detailed due diligence work programme, which, together with independent assay reports, have confirmed the high-grade nature of the manganese mining operation.

The company has also advanced discussions with a potential offtaker in Europe for 100% of the saleable product produced by the mine.

Marula expects its payback of the initial investment in GIM and the mine to happen within the next 12 to 15 months.

The Larisoro mine currently comprises three shallow openpits that extend over a cumulative lenght of about 600 m. Site inspections by Marula’s technical team indicates that the manganese mineralisation appears to remain open down-dip and along strike.

Notably, the operations at the mine have historically been limited by inefficient mining and processing activities, aged and poorly maintained equipment and a lack of geological understanding, as well as modern mine planning.

With this invsetment marking a first for Marula in Kenya, CEO Jason Brewer says the investment is firmly in line with the company’s strategy in East Africa and with respect to the battery metals sector.

Marula’s primary listing is on the UK-based Aquis Stock Exchange, but it is considering a dual listing on the Nairobi Stock Exchange in due course.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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