British firm buys majority stake in Homa Bay rare earth metal company
London Securities Exchange-listed Kazera Global has inked a deal to buy 71 percent stake in Homa Bay-based Great Lakes Graphite for 750,000 pounds (Kes107 million).
Great Lakes Graphite holds three licenses in Homa Bay and Buru Hill, producing rare earth elements, a major constituent material used in the manufacturing of magnets used in electronic vehicles and turbines.
The three areas are in near proximity to each other, covering a total area of 346 square kilometres.
Kazera joins a growing list of LSE-listed companies keen on mining business in Kenya including Shanta Gold, Caracal, and Red Rock Resources.
“The acquisition of a 71 percent interest in Great Lakes Graphite, gives the Company a unique exposure to three highly exciting exploration licenses which have the demonstrable potential for economic delivery of some of the most important materials for the 21st century,” said Dennis Edmonds, Chief Executive Officer of Kazera.
Kazera said it will make the payments in three tranches and will have an option of purchasing Caracal Investment’s 20 percent of Great Lakes Graphite for $1 million (Kes117.5 million).
Identified exploration milestones will be funded by Kazera and will lead to the completion of a definitive feasibility study and facilitate the granting of a mining license over the project.
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Cumulatively, these technical milestones are expected to cost up to $2.5 million (Sh293.7 million) and will be funded through the Company’s cash flows over a 30-month period.
Kenya is not a resource-rich country and the few natural resources have not been utilized to reap maximum benefits.
Despite extensive prospecting for minerals by several multinationals especially in the western belt over the years, none has set up a thriving commercial venture yet.
The region is still replete with artisanal miners risking lives in very dangerous mining expeditions and making very little returns.
However, the country has received increasing interest from British multinationals citing significant local and national infrastructure, supported by a new, progressive Mining Act and a fast-growing exploration and mining presence.
London-based gold miner Red Rock Resources has found commercially viable ore samples in its Migori project after performing new exploratory drilling in the area.
This follows Shanta Gold, which is exploring for gold in western Kenya saying it had found some high-grade gold in Kakamega after drilling 11 exploratory holes in Isulu last year.
Caracal Gold formerly Papillon, which owns Kilimapesa gold mine in Lolgorian, Trans Mara, Narok County wants to dual list at the London and Nairobi exchanges to fund the growth of its operations.
In a company update, the firm said it will list on the Nairobi Securities Exchange (NSE) via introduction at the Growth Enterprise Market Segment (‘GEMS’) in the second quarter of this year.
