Kazera Global, a UK company, has signed a deal to acquire a 71% stake equivalent to KSh 108.2 million (£ 750,000) in Great Lakes Graphite-a Canadian firm that has vast interests in rare metal mines in the Nyanza region, Kenya.
Kazera will pay £250,000 in the first tranche at 1.5p per share, and £250,000 in the second tranche at 2.5p per share, upon completing the Definitive Feasibility Study (DFS).
The company will pay £250,000 in the third tranche, at 2.5p per share, following the announcement of initial ore production.
Kazera said that the transaction aligns with its strategy to invest in companies and projects in Africa within the mining and resource sectors.
Through acquiring a majority stake in Great Lakes Graphite, Kazera Global will get access to three exploration licenses covering the Homa Bay and Buru Hill Rare Earth Elements projects in Kenya.
The licenses covering a total area of 346km2 are located close to each other and near established rail and road transport links and large towns in Kenya.
The UK firm is focused principally, but not exclusively, on the resources and energy sectors.
Kazera Global Investments in Africa
Currently, the UK firm has two primary investments in African Tantalum (Pty) Ltd; a Namibian-based operation focused on resource definition of tantalite and lithium and a diamond and Heavy Mineral Sands project in South Africa.
According to Kazera CEO Dennis Edmonds, the acquisition of a 71% interest in Great Lakes Graphite gives the company a unique exposure to three highly exciting exploration licenses, which have the demonstrable potential for economic delivery of some of the most critical materials for the 21st century.
Great Lakes owns the three licenses covering the Homa Bay and Buru Hill rare earth projects.
As part of the transaction, Kazera Global has the option of allowing Caracal Investments Limited to buy 20 per cent of Great Lakes for $1 million (KSh118m).
Assuming that Kazera uses this option, the shareholding of Great Lakes Graphite will have Kazera owning 51%, Caracal at 20% and current shareholders controlling a 29% stake.
Available data shows that the Nyanza area contains 65,000 tonnes of cerium, 52,000 tonnes of lanthanum and 18,000 tonnes of neodymium, said the firms.
Rare earth elements are a significant component in the manufacture of magnets for electronic vehicles and turbines.