Shuka Minerals progressing proposed acquisition of Kabwe Mine

14th Feb 2025 12:07

(Sharecast News) - Shuka Minerals updated the market on its proposed acquisition of Leopard Exploration and Mining and the Kabwe Zinc Mine in Zambia on Friday, following the signing of a conditional share purchase agreement in December.

The AIM-traded company said it remained on track to complete the acquisition by March, with ongoing legal and corporate work to finalise the remaining conditions.

Since the start of the year, Shuka said its executive team and advisers had conducted site visits in Zambia and held meetings with key stakeholders in Lusaka and South Africa.

A recent visit to the Kabwe Mine allowed its newly-appointed CEO Richard Lloyd to inspect high-grade zinc mineralisation from surface deposits, as well as observe small-scale mining and processing operations in the area.

Samples collected during the visit were submitted to ALS Zambia's laboratory in Lusaka for grade and metallurgical testing, with results expected later this quarter.

The company reported strong engagement from Zambian stakeholders, including the Kabwe district commissioner and local mining operators.

Shuka said the Zambian minister of mines, permanent secretary, and the director of the Mining Cadastre had also expressed support for its plans to establish operations in the country.

The firm said it was finalising the appointment of GeoQuest, an independent geological and environmental consultancy, to assist with project development.

Work was also underway to review historical geological data, compile new project budgets, and finalise implementation schedules for board approval.

The company added that it was continuing to manage its working capital while progressing discussions with AUO Commercial Brokerage and other financial advisers on securing longer-term funding.

That included raising capital for the cash consideration due under the acquisition agreement, and funding post-completion exploration and development at Kabwe.

Shuka said it had so far drawn £0.25m from its previously-announced £0.5m loan facility with Gathoni Muchai Investments, with further drawdowns planned this quarter.

Additionally, the company said it was in discussions with potential operational partners for its Rukwa Coal Mine in Tanzania, as it looked to strengthen its broader mining operations in Africa.

"A great deal has happened in a very short space of time since my engagement in mid-December 2024 and a new Shuka board having been put in place, with the focus being to complete the acquisition and re-develop the famous Kabwe Mine in Zambia," said chief executive officer Richard Lloyd.

"We continue to understand the full potential of Kabwe and the support from potential funders in various forms of funding ideas is encouraging."

Lloyd said the budgeting and timeframes needed to be "clearly" thought out.

"I thank our expanding team and advisers for their unwavering support and great ideas.

"The support locally in Kabwe and nationally for such an iconic Zambian asset is extremely gratifying."

Reporting by Josh White for Sharecast.com.