Kropz secures $6.7 million loan amid production challenges

LONDON - Kropz Plc (AIM:KRPZ), an emerging African phosphate producer, has secured a loan facility of approximately $6.7 million to address capital expenditure needs and operational expenses at its Elandsfontein mine, the company announced today. The loan agreement with ARC Fund, a related party, comes as Kropz faces production and sales challenges during the mine’s trial phase.

In the first quarter of 2025, Elandsfontein produced 77,318 tonnes of phosphate concentrate and achieved sales of 88,554 tonnes. Despite a record production month in January, Elandsfontein experienced a sales delay in April due to the late arrival of a vessel, resulting in no sales for the month.

The loan from ARC carries an interest rate of the South African prime overdraft rate plus 6%, with no fixed term and is repayable on demand with a minimum 15 business days’ notice. Kropz SA (Pty) Ltd has provided security for the loan, which was partially drawn down in two tranches in late April and early May.

The directors of Kropz, having consulted with the company’s nominated adviser, have deemed the terms of the loan facility fair and reasonable for shareholders. Gerrit Duminy, a director of Kropz and representative of ARC, abstained from the board’s approval process to maintain transactional integrity.

Additionally, Kropz has announced a legal stay on a claim related to an alleged breach of first refusal rights dating back to November 2018. The stay, agreed upon with Teh Hong Eng Investments Holding Limited and Meridian Investment Group PTE. Limited, is set to expire in July 2025, with further updates to be provided as necessary.

This financial maneuver aims to support Kropz’s continued efforts to overcome the operational hurdles at Elandsfontein and transition to full production capacity. The information released is based on a press release statement from Kropz Plc.

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