Kazera Global Investments - Update
Revenues from the SA diamond operation soon to be eclipsed by HMS and tantalum/lithium projects following major US$7.5m investment for 49% of lithium SPV
Kazera is an Africa focused mining investor with a large high-grade tantalum project in Namibia. Full scale mine production will soon commence in earnest with a fully funded plant upgrade to increase volumes and achieve commerciality ahead of an expansion into lithium. A transformative deal in June 2020 took Kazera into diamonds and heavy mineral sands (HMS) with imminent HMS revenues now anticipated.
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Blue-sky potential of tantalum and lithium mine now to be unlocked
Kazera is rapidly set to become a lithium producer - a “hot” area in the battery metals space whilst commercial tantalum production is now commencing. Very recently, Hebei Xinjian agreed to invest US$7.5m in cash, equipment & services to gain a 49% share of the lithium sales. Such funds will pay for the upgrading of the plant to swiftly improve tantalum production, paving the way for lithium production to begin in early 2023.
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First production from 72,000tpa high-grade HMS project within months
The Mining Permit for the HMS has now been granted. Initially, unprocessed material will be sold, but the company is in discussions with a number of partners to build a separation plant, allowing KZG’s production to be sold at a price uplift of circa 500%.
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REE project with an “in the ground” valuation of US$3.3bn back in 2011
Kazera has recently spread its wings once again with the intended acquisition of a 71% interest in an REE project in Kenya pending licence approval. Over the last 70 years this has seen the discovery of several large carbonatite bodies with residual REE enrichment.
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Risked conservative NPV suggests upside of close to more than 500%
Our conservative valuation shows the huge potential which we see in the stock at present. We update coverage of Kazera with a target price of 4.55p and reiterated Conviction Buy stance.
Kazera Global is operating as an investor in the resources and energy sectors. Co.'s business consists of an investment activity being the tantalite mining operation in Namibia. Co. is focused on the projects primarily in, but not limited to, Africa within the mining and resource sectors including direct investments in securities and similar financial instruments including any combination of the following: equity securities (predominantly unlisted); listed and unlisted debt securities that may be rate or not rated (bonds, debt instruments, convertible bonds and bonds with warrants, fund-linked notes with a capital guarantee, loan facilities etc.); and hybrid instruments.
Align Research is a commissioned research company founded in November 2015 in order to provide the under-served smaller company space with high quality analysis. We have an initial focus on the natural resources sector, in which we see significant opportunities given the current once in a generation bear market, however all undervalued small caps (sub £100m) are considered by our team. Align was founded by industry professionals with decades of experience in the stock markets, headed up by highly qualified individuals from both fund management and analytical backgrounds.
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