Aim-listed Kazera Global subsidiary Whale Head Minerals (WHM) has signed a sales and offtake agreement for its heavy mineral sands production with Fujax South Africa – a wholly owned subsidiary of Fujax Group.

Kazera says it remains committed to advancing its high-grade heavy mineral sands project in South Africa.

Production has recently commenced at a pilot plant for the WHM project, which the company intends to scale up as it pursues mining rights for the nearby Perdevlei heavy mineral sands concession.

This concession, which has a land area about 34 times larger than WHM’s current Walviskop project, has similar project dynamics and “significant potential”.

The agreement with Fujax covers an initial 100 000 dry tonnes of heavy mineral sands, delivered in monthly batches of about 6 000 t, with first sales expected by March. 

Under the terms of the agreement, WHM will sell its heavy mineral sands to Fujax at a “factory gate” price, at 80% of the anticipated price achieved by Fujax after deduction of costs.

“I am delighted that we have managed to secure this offtake, which validates the progress we have made at WHM. Fujax is a well-established global commodities company and its willingness to provide Kazera with a significant prepayment and fair pricing structure speaks volumes about its quality as an offtake partner.

“Fujax’s contacts and financial backing makes them perfect partners both in the short term and for the planned expansion of our operations into the Perdevlei HMS project, which has a land area about 34 times larger than WHM’s current Walviskop project.

“Our focus is now on fine-tuning the WHM plant to meet Fujax’s requirements with a view to ramping up production early in the new year,” says Kazera Global CEO Dennis Edmonds.

He adds that while this 100 000 t offtake is substantial, it represents just the beginning.

He notes that Walviskop boasts a Joint Ore Reserve Committee-compliant indicated resource of about 1.5-million tonnes of heavy mineral sands, which is continually being replenished by natural wave action.

“Add to that the resource which is represented by Perdevlei, and the company becomes a serious player in the market. This agreement therefore represents a springboard for further growth and future opportunities for the company,” he expresses.

Fujax will be responsible for transportation and the separation of the heavy mineral sands into its component minerals, will carry all costs after the mine gate and will negotiate the final sale of the products.

WHM will receive the balance of the sales price less costs, including a marketing fee, within five days of Fujax finalising the sale of the products. 

As part of the agreement, Fujax will prepay $600 000 to WHM in two equal instalments, scheduled for December and January.

The prepayments will be repaid in monthly instalments from March 2025 or set off against future monthly sales.

The prepayment amounts will be applied to advancing the WHM project in readiness for production and supply to Fujax and is a strong indication of Fujax’s support for the project and desire to buy Kazera’s heavy mineral sands product.

“We are delighted to secure this partnership and offtake agreement with WHM. The quality of the HMS at Walviskop is excellent and, with Kazera planning to significantly expand the project, we feel it is a hugely opportune time to be partnering with the Group,” says Fujax Group CEO Chris Dyason.