Aim-listed Kazera Global’s subsidiary, Whale Head Minerals (WHM), has been requested by the Department of Mineral Resources and Energy (DMRE) to furnish a guarantee in respect of its obligations to rehabilitate the mining area covered by its application for a mining right in South Africa’s Northern Cape province.

The application for a mining right is for an area called 2a or Perdevlei, which covers about 3 095 ha, of which about 170 ha contain high heavy mineral sands (HMS) deposits suitable for immediate mining.

Perdevlei is a short distance north of WHM’s current Walviskop HMS project of 5 ha.

WHM says it believes the richness of the HMS deposit at Perdevlei is at least as good as that at Walviskop and, like Walviskop, the HMS deposits are constantly replenished by wind and tidal action.

Owing to WHM’s knowledge of the Perdevlei area and its confidence in its ability to mine HMS in the region, it has elected to apply for a mining right for the concession, rather than adopting the traditional route of applying for a prospecting right and then, after a period of mapping, drilling and sampling, applying for a mining right to the site, the company explains.

It believes this approach best aligns with its objective to grow the company and create shareholder value on an accelerated timescale.

This guarantee ensures sufficient funds are available to undertake rehabilitation and remediation of any adverse environmental impacts of mining activities, both during the life of the mine and at closure.

This is as required under South Africa’s National Environmental Management Act (NEMA), and to meet this obligation the company has taken out insurance, which is standard practice across the mining industry.

The DMRE now has a defined period in which to review WHM’s application and issue the environmental authorisation.

If this process is successful, the environmental authorisation is expected to be issued by the end of January 2025. Interested and affected parties will then be given 21 days to lodge any appeals before the mining right can be granted.

If granted, WHM will immediately be entitled to start the extraction and sale of HMS on the Perdevlei concession.

To fund the insurance policy required under NEMA, the company has entered into a short-term loan agreement with one of its largest shareholders, Tracarta, pursuant to which it has agreed to provide the company with an unsecured term loan of £45 000.

“The request for the environmental guarantee is an enormously encouraging step in our progress towards obtaining a mining right. With our Walviskop HMS project expected to be generating revenue imminently, the timing of this could not be better,” Kazera Global CEO Dennis Edmonds says.

 “During the last few years, we have accumulated a great deal of knowledge on the quality of the HMS in the Alexander Bay area and how best to mine and process them. We believe that Perdevlei, containing HMS deposits of over 30 times those of Walviskop, offers us the opportunity to scale up our heavy mineral sands business to make us a significant operator in the region,” he adds.

Edmonds also thanked Tracarta for making funds available to allow the company to progress with the mining right application, without putting pressure on existing cash resources as it moves towards cash generation.