Kazera Global Investments
Move into diamonds and heavy mineral sands at cycle nadirs to fund the blue-sky potential of a world-class tantalum mine
Kazera is an Africa focused mining investor which, in 2014, took a 75% stake in Aftan, owner of a high-grade tantalum project in Namibia & following the 26 June 2020 RNS, now has 100% control. Commercial mine production has yet to be achieved due to a lack of water but has qualified several shipments to run directly into End User production. A 17km pipeline from the Orange River would solve this problem, coupled with some plant upgrades, and cost @ US$11 million. A recent transformative deal takes Kazera into diamonds and heavy mineral sands (HMS) but, critically, with the anticipated cash flows intended to provide the funding runway to fully develop this large-scale world class tantalum opportunity.
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Early cash flow at the diamond operation before the year-end
Near term production and revenue generation has begun at a secured untouched mining block of beach and marine gravels at the well-known diamond operation at Alexkor in South Africa. This state-controlled mining area has produced 10 million carats of gem quality diamonds since 1928.
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72,000tpa high-grade HMS potential within 12 months of approval
The vendor of the diamond and HMS projects has made tremendous progress in developing both these interests, which come with a good in-country management team with >40 years local diamond experience.
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High grade world-class tantalum project with growing lithium potential
Tantalum is one of the rarest elements on the planet and Aftan’s partners are large US electrical equipment companies ready to receive shipments.
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Risked conservative NPV suggests upside of over 200%
Our conservative valuation shows the potential. We initiate coverage of Kazera with an initial target price of 2.50p and Conviction Buy stance.
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RISK WARNING & DISCLAIMER
Kazera Global Investments is a research client of Align Research. Align Research & a Director of Align Research hold a major interest in the shares of KZG. 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 | 2020E | 2021E | 2022E | 2023E |
|---|---|---|---|---|
| Revenue (£'000) | - | 3,380 | 10,800 | 13,100 |
| Pre-tax (£'000) | (900) | 210 | 1,510 | 2,000 |
| EPS (p) | (0.19) | 0.01 | 0.15 | 0.17 |