Aim-listed Shuka Minerals is progressing work to complete the acquisition and redevelopment of the Kabwe zinc mine, in Zambia, with a new board put in place.

In a corporate and operational update published on February 14, recently appointed CEO Richard Lloyd says the company continues to understand the full potential of Kabwe and highlights the support from potential funders in various forms of funding ideas, as “encouraging”.

He emphasises that the budgeting and timeframes need to be clearly thought out.

The company’s proposed acquisition of Zambian mining and exploration company Leopard Exploration and Mining (LEM) and the Kabwe mine, located in central Zambia, follows the signing in December 2024 of a conditional share purchase agreement (SPA) with the LEM shareholders.

Since the start of the year, the company and its legal and corporate advisers have been working to finalise the outstanding conditions to complete the Kabwe acquisition ahead of the expected March completion date and undertaking preparatory work to drive the project forward following completion.

Technical site visits have been undertaken in Zambia and meetings in Lusaka and South Africa have also been held with key stakeholders and the company’s existing, and potentially new, providers of finance.

Over the past three weeks, the company’s executive management and key advisers and consultants have been in Southern and East Africa.

It highlights that positive meetings have been held with a number of key stakeholders in respect of the Kabwe acquisition and the company’s existing Rukwa coal mining operations in Tanzania.

A successful site visit was undertaken to the Kabwe mine and surrounding areas.

Lloyd was able to observe high-grade zinc mineralisation from identified deposits within the Kabwe mine, that were outcropping at surface, as well as local small-scale zinc and base metals mining and processing operations.

Several samples were taken during the site visit and these have been submitted to ALS Zambia’s laboratory in Lusaka for grade and metallurgical testing.

The assay results from these samples are expected to be received later in the current quarter.

Key stakeholders are said to be positive about proposed acquisition of the Kabwe mine.

The company’s executive management and consultants are continuing to review and compile historical geological, geophysical and mine development data for the Kabwe mine project.

The company is finalising the appointment of Zambian-headquartered GeoQuest to assist in the Kabwe mine project development site activities and planning.

New project budgets and implementation schedules are also being finalised and will be submitted to the board for approval later this quarter.

Shuka says it continues to carefully manage its working capital position and its creditors while progressing discussions with AUO Commercial Brokerage as previously announced, and also continuing to work with its financial advisers and a number of Europe- and Africa-based groups on its longer term financing arrangements.

This includes the funding necessary to meet cash consideration due to the LEM shareholders under the SPA to enable the company to complete the Kabwe acquisition, and funding required to start its exploration and development work at the Kabwe mine post-completion.

The company previously announced an agreement with Gathoni Muchai Investments (GMI), its second largest shareholder, for an unsecured, interest-free and non-convertible loan of £500 000, with £250 000 of this drawn to date and further drawdowns planned in the current quarter.

Shuka says it continues to work with its local management team at the Rukwa coal mine and has also started discussions with potential operational partners.