Kazera secures £0.5m facility with two large shareholders

The AIM-traded firm said the funds would be used to finance the cash component of its recent agreement with Tectonic Gold, as well as to provide working capital as Kazera advanced its Deep Blue Minerals (DBM) and Whale Head Minerals (WHM) operations towards production and revenue generation.

It said the loan facility was split into two unsecured term loans - £0.15m from Richard Jennings and £0.35m from Tracarta.

The loans carried a fixed interest rate of 12%, with the option for lenders to convert interest payments into Kazera shares at a price of 1p per share.

Kazera said the loans were set to mature on or before 30 October 2025.

Funds would be made available in four tranches starting on 11 August 2024, and continuing monthly until 25 October 2024.

In addition to the loans, the lenders would receive warrants to subscribe for new Kazera shares at 1p apiece, with a potential adjustment to the exercise price if the company issued equity at a lower price within two years.

The agreement with Richard Jennings was classified as a related party transaction under the AIM rules, given his status as a significant shareholder.

After consulting with their nominated adviser, Kazera’s directors concluded that the terms of the loan were fair and reasonable for the company’s shareholders.

“I am grateful to both Richard Jennings and Tracarta for making these funds available to Kazera in order to make it possible to complete the WHM and DBM deals, and give us what we anticipate being sufficient cash cover to take the company into being cash generative,” said chief executive officer Dennis Edmonds.

“The board feels very strongly that raising equity at anywhere near the current levels in the present market would not be in the interest of shareholders as it does not remotely reflect the expected immediate opportunity from our South African operations.”

At 1039 BST, shares in Kazera Global were up 12.5% at 0.45p.

Reporting by Josh White for Sharecast.com.