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LONDON - Shuka Minerals Plc (AIM/AltX:SKA) has secured a £2 million financing agreement with its second-largest shareholder to complete the acquisition of Leopard Exploration and Mining Limited (LEM) and the Kabwe Zinc Mine in central Zambia.
According to a Tuesday press release, Shuka entered into an agreement with Gathoni Muchai Investments Limited (GMI) on June 30 to increase an existing loan facility by £1.5 million. The expanded financing will cover the remaining $1.35 million (approximately £1 million) cash consideration due to LEM vendors, initial exploration work at the Kabwe Mine, and general working capital requirements.
The loan carries a 5% annual interest rate, with repayment scheduled to commence by June 30, 2026. GMI will receive a 3% establishment fee (£45,000) to be settled in 562,500 new Shuka shares at a reference price of 8 pence per share.
Shuka also announced that all conditions precedent for the LEM acquisition have been satisfied. Under an addendum to the original Share Purchase Agreement, the $3 million share consideration will be settled through the issuance of 28,640,042 new ordinary Shuka shares at 7.737 pence per share, representing a 10% discount to an agreed reference price of 8.5965 pence.
Additionally, LEM vendors will receive 2 million warrants with an exercise price of 12.5 pence per share, expiring December 31, 2027.
The Kabwe Mine operated continuously for 88 years until its closure in 1994 due to commodity prices at that time. It was previously operated by Anglo American (JO:AGLJ) plc and Zambia Consolidated Copper Mines Limited.
Following completion of the acquisition, Shuka plans to implement a three-phase exploration and development program at the Kabwe Mine, including geophysical surveys, resource drilling, metallurgical testing, and feasibility studies, with the ultimate goal of resuming mining operations.
The financing agreement with GMI constitutes a related party transaction under AIM rules, as GMI is a substantial shareholder in the company.
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