LONDON: Marula Mining (AQSE: MARU), an African focused mining and development company, has announced a deal with Gems and Industrial Minerals Limited (GIM), a Kenyan manganese mine operator, for a stake in the Larisoro Manganese Mine in Northern Kenya.
The Larisoro Manganese Mine is a shallow open pit mine that produces high-grade manganese ore, which is sold to the Asian markets. The mine has been operating intermittently since 2012 on two granted mining permits.
Under the terms of the deal, Marula will pay GIM £300,000 in new ordinary shares and invest US$1,500,000 in new mining and processing equipment to increase the monthly production of manganese ore to between 5,000 and 10,000 tonnes. Marula will also pay GIM additional sums in cash or shares upon completion of certain milestones, such as exploration, sales, and option exercise.
The deal also gives Marula an option to increase its stake in the mine to 70% within 12 months by paying GIM £1,250,000 in cash or shares.
Marula has completed a detailed due diligence work program that confirmed the high-grade nature of the manganese ore and the potential to expand production through major investment.
The Larisoro Manganese Mine is located within the Proterozoic Mozambique mobile belt, a geological region that hosts several mineral deposits. The manganese ore body is found in the faulted contact zone between two types of rocks and extends for over 5km.
The deal is subject to GIM entering into a Technical Support Agreement and a Commercial Agreement with Marula, which are expected to be signed in mid-March 2024.
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