Kazera Global first invested in African Tantalum (Proprietary) Limited (“Aftan”) in 2014 when a 75% interest was acquired for £0.66 million. The remaining 25% was acquired in 2020 for a further £0.22 million. Aftan initially held a 60% interest in the Tantalite Valley Mine (“TVM”), located in South Eastern Namibia. This was increased to 100% in 2015.

In July 2022, Kazera announced an agreement to secure a non-dilutive US$7.5 million investment in return for a 49% stake in the Company’s marketing, sales, and export subsidiary for all lithium production from the TVM.

Subsequently, in December 2022, this was improved upon when Kazera announced that it had signed a definitive agreement to sell its 100% interest in Aftan to Hebei Xinjian Construction (“Xinjian”) for a cash consideration of US$13 million, plus a debenture payment of 2.5% of the gross sales of produced lithium and tantalum for life-of-mine.

Full operational control passed to Xinjian on the transaction date, meaning Kazera would not have to incur any of the costs related to mining, transport or building a processing plant, however, the Agreement allowed for 100% ownership of the shares to be retained by Kazera, passing to Xinjian only on payment in full.

Aftan has been deconsolidated from the Company’s financial statements with effect from 4 January 2023 because in accordance with the terms of the sale agreement, it had relinquished control of the Aftan in favour of the purchaser, Hebei Xinjian Construction Close Corp (“Hebei Xinjian”) with effect from that date.

Kazera retained the right to cancel the transaction and retain all amounts paid to date in the event of default by Hebei Xinjian. The Company is now instituting legal proceedings against Hebei for payment of the balance due to it.

Importantly, Kazera still owns the underlying asset and will retain all payments received from Xinjian to date.