Aim- and AltX-listed Shuka Minerals has reported a further delay in completing its acquisition of Zambia’s Leopard Exploration and Mining (LEM) and the Kabwe zinc mine, after funds from its financing partner Gathoni Muchai Investments (GMI) failed to arrive as expected.

The company said on November 3 that, despite written confirmation from GMI, the $1.35-million balance of the cash consideration owed to the LEM vendors had not yet been received.

On October 27, GMI advised that payments would proceed by October 31, but later informed Shuka that administrative issues had delayed the process. GMI had since indicated that payments would start this week.

Shuka said it remained in regular contact with GMI regarding the status of the funds.

“It is disappointing to be reporting a further delay, though we have been assured by GMI that funding to allow the completion on Kabwe will soon be provided. The company remains committed to finalising the acquisition using the non-dilutive and favourable terms available under the GMI facility, rather than alternative sources of funding that may be available to the company,” Shuka CEO Richard Lloyd said.

The company noted that the LEM vendors remain supportive of completing the transaction once the balance of the cash consideration is paid, together with the issue of consideration shares and further warrants. The acquisition will also require the formal transfer of LEM shares to Shuka.

Shuka added that its financial position remained tight ahead of receiving the expected GMI funds and proceeds from the planned sale of material stockpiled at its Rukwa operation, in Tanzania.

The company previously reported that about 60 000 t of fines were stockpiled on surface at Rukwa and that it aimed to sell this material for between $7/t and $8/t. It said negotiations with potential buyers were ongoing.

Shuka said that, prior to the receipt of funds from anticipated sales of fines, and pending receipt of funds due from GMI, it had limited cash resources. The company’s board nevertheless expected that, with the support of creditors, Shuka’s current resources would be sufficient to meet near-term requirements.