Kazera Global Investments - Update
Revenues from the SA diamond operation soon to be eclipsed by HMS and tantalum/lithium projects following major US$7.5m investment for 49% of lithium SPV
Kazera is an Africa focused mining investor with a large high-grade tantalum project in Namibia. Full scale mine production will soon commence in earnest with a fully funded plant upgrade to increase volumes and achieve commerciality ahead of an expansion into lithium. A transformative deal in June 2020 took Kazera into diamonds and heavy mineral sands (HMS) with imminent HMS revenues now anticipated.
Blue-sky potential of tantalum and lithium mine now to be unlocked
Kazera is rapidly set to become a lithium producer - a “hot” area in the battery metals space whilst commercial tantalum production is now commencing. Very recently, Hebei Xinjian agreed to invest US$7.5m in cash, equipment & services to gain a 49% share of the lithium sales. Such funds will pay for the upgrading of the plant to swiftly improve tantalum production, paving the way for lithium production to begin in early 2023.
First production from 72,000tpa high-grade HMS project within months
The Mining Permit for the HMS has now been granted. Initially, unprocessed material will be sold, but the company is in discussions with a number of partners to build a separation plant, allowing KZG’s production to be sold at a price uplift of circa 500%.
REE project with an “in the ground” valuation of US$3.3bn back in 2011
Kazera has recently spread its wings once again with the intended acquisition of a 71% interest in an REE project in Kenya pending licence approval. Over the last 70 years this has seen the discovery of several large carbonatite bodies with residual REE enrichment.
Risked conservative NPV suggests upside of close to more than 500%
Our conservative valuation shows the huge potential which we see in the stock at present. We update coverage of Kazera with a target price of 4.55p and reiterated Conviction Buy stance.
RISK WARNING & DISCLAIMER
Kazera is a research client of Align Research. Align Research’s director is the largest direct & indirect shareholder in Kazera Global Investments. Full details of our Company & Personal Account Dealing Policy can be found on our website http://www.alignresearch.co.uk/legal/
For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.
| Year to June | 2021A | 2022E | 2023E | 2024E |
|---|---|---|---|---|
| Revenue (£’000s) | 55 | 230 | 4,930 | 13,130 |
| PTP (£,000) | (1,164) | (640) | 2,500 | 7,570 |
| EPS (p) | (0.17) | (0.08) | 0.22 | 0.54 |