Keras Resources restarts activities at Nayega mine

Keras Resources announced the resumption of activities at the Nayéga manganese mine in Northern Togo on Thursday, after signing a cooperation agreement with the Republic of Togo on 17 May.

The AIM-traded firm said that under the agreement, the state, through its wholly-owned investment company Société Togolaise de Manganèse (STM), was overseeing a public-private partnership award procedure to appoint a contractor to manage all activities at Nayéga.

It said the successful bidder of the ongoing tender process would be tasked with managing mining and processing operations at Nayéga, and providing a comprehensive logistics solution from the mine to the port.

The tender process was set to end on 7 June, with the requirement for the awarded contractor to be fully mobilised within six months after that.

Keras said the state had already started mobilisation efforts at Nayéga to ensure infrastructure readiness, including water pipelines and access roads, for the prompt re-establishment of operations.

The timing of the tender process aligned favourably with recent market trends in the manganese industry, the board said, as it had experienced a rebound from a prolonged period of low prices.

Given Nayéga's operational readiness, it was potentially poised to swiftly capitalise on the market upswing.

Keras previously disclosed advisory and brokerage agreements with the Togo, entailing a 1.5% advisory fee on gross revenue generated from the Nayéga mine for three years, and a 6.0% brokerage fee on gross revenue for the provision of brokerage services, applicable to the lesser of 3.5 years or 900,000 tonnes of beneficiated manganese ore produced and sold from Nayéga.

“The mobilisation of key staff at Nayéga and the issue of a request for tender for the management of the Nayéga operation is a significant step forward in the development of this asset which the company fully supports and is very much in line with the 2023 cooperation agreement we have with STM and sets a clear picture of how the asset will now be developed to benefit all stakeholders including Keras,” said chief executive officer Graham Stacey.

“We look forward to working closely with the management team of STM.

“The progress at Nayéga is very positive for Keras from an additional cashflow perspective and will underpin what has been a hugely productive 6 months at the company's flagship operation in Utah, where its subsidiary Falcon Isle Resources, now operating from its 100% owned facility in Delta, is finalising the construction of a fully integrated granulator plant to produce Phosul granules under the joint venture with partners, Phosul.”

Stacey said the Phosul production line would augment the already-installed processing infrastructure producing sized dry rock phosphate products from the high-grade Diamond Creek phosphate mine.

“I look forward to updating shareholders on a continuous basis as we move forward on these two fronts.”

At 1137 BST, shares in Keras Resources weer up 4% at 2.08p.

Reporting by Josh White for Sharecast.com.