Marula Mining PLC (AQSE:MARU A2X:MARU) Final Results for the year ended 31 December 2023

Marula Mining (AQSE:MARU A2X:MARU), an African focused mining and development company, announces its results for the year ended 31 December 2023.

Summary Financial Statements are set out below. A full copy of the audited Annual Report will be available shortly on the Company’s website, www.marulamining.com and will be posted to shareholders in due course.

Following the publication of the Final Results for the year ended 31 December 2023, the Ordinary Shares in the Company will be restored to trading on the Apex Segment of the AQSE Growth Market and on A2X Markets with effect from 08:00 a.m. on 16 September 2024.

Highlights

•    Material growth in the Company’s battery metals projects located inSouth Africaand East Africa with a number of new project acquisitions and significant development across all business areas in the 2023 financial year
•  This operational progress by the Company resulted in an increase in its market capitalisation from approximately£3.76 million at the start of the year to approximately £22.24 million at the end of the year and represented an almost six-fold increase
•    The Company’s share price also performed well during the year rising from4.15 pence per share at the start of the year to 13.125 pence per share at the end of the year and representing over a three-fold increase
•  The Company’s aggressive growth and development strategy in 2023 was able to be committed to following the signing during the year of a Subscription Agreement, Co-Development Agreement, and a Relationship Agreement with Q Global Commodities Group (“Q Global”), one ofSouth Africa’s leading independent commodity, mining, logistics and investment funds, for an initial subscription amount of £3.75 million (“Subscription Amount”).
•    TheSubscription Amount was subsequently increased to £8.53 million post period, and assigned to an affiliate of Q Global, AUO Commercial Brokerage LLC (“AUO”) based in Dubai
•   As at the date of this report, the Company has currently drawn approx.£2.40 million of £8.53 million Subscription Amount and £6.13 million remains available for the Company on a committed and discretionary basis to continue to advance its mine production, mine development and exploration strategy in the battery metals sector in South and East Africa
•    Of this£6.13 millionSubscription Amount, £2.50 million has been committed to fund future exploration activities and corporate working capital requirements, and the balance is available on a discretionary basis to fund additional exploration and development activities at the Blesberg Lithium and Tantalum Mine (“Blesberg”) and at the Kinusi Copper Mine (“Kinusi) and the Company’s other battery metals projects in South Africa and East Africa
• During the 2023 year, the Company made material progress at Blesberg which included:
•    Mining, processing, sampling of the existing stockpiles
•    Trial shipment of high-grade spodumene ore toChina
•    Completion of a majorUS$1.35 million resource drilling, exploration, and mine planning program, which included airborne geophysics, multispectral satellite imaging, geological modelling, open pit mine design, environmental studies, and discounted cash flow analyses
•    Mine planning and optimisation work was also completed as part of the Company’s planned open pit mine production which is now to advance in 2024 following receipt of all necessary regulatory approvals
•  Investment in new mining and processing equipment, including new mobile mining equipment and new processing equipment such as the Rados SRF100-8 XRF and Tomra COM XRT 1200 Ore Sorters
•    At Kinusi, the Company increased its commercial interest from 49% to 75%, and completed its Phase 1 Exploration Program in 2023 and which confirmed:
•  The identification of a copper mineralised corridor that extends for over 1 kilometre in length and over 300 metres in width at the main Sasimo Prospect
•    High-grade assay results from the Sasimo Prospect which included 15.48%, 11.69%, 11.03%, 8.11%, 6.55% and 6.54% copper
•  An initial Exploration Target at Kinusi of a 10-15 million tonnes deposit of high-grade copper, gold, and other base metals, with the potential to increase to in excess of 50Mt on completion of definitive resource drilling programs to now be implemented by the Company.
•     At the Bagamoyo Graphite Project (“Bagamoyo”), the Company completed its Phase 1 Exploration Program and this confirmed:
•  Large flake graphite mineralisation at the Mihuga and Saadan South Graphite Prospects locatedon East-West trending graphite mineralised envelop that extends for approx 500 metres in strike length and 50 metres in width at surface and is interpreted to extend for two kilometres in strike length and 200 metres in width over six of the 22 granted mining licenses that make up Bagamoyo
• High grade assay results were obtained from the Mihuga Prospect and which included 19.71%, 19.33%, 15.65%, 10.92% and 9.13% Total Graphite Content
•  Medium to coarse  graphite flakes were identifiable in four of the samples taken from the Mihuga Prospect which assayed 11.86%, 15.65%, 19.33% and 19.71%
•    The high-grade assays and coarse flakes at the Mihuga Prospect demonstrate the potential that exists in that prospect
• During the 2023 financial year, the Company also acquired majority interests in a number of additional battery projects and these included the Nyorinyori and NyoriGreen Graphite Projects in Tanzania and the Korridor Lithium Project.
•    The Companystrengthened its executive management team during 2023, with a number of key appointments made to support the operational activities in South Africa and East Africa. These appointments included Mr Martin Westerman as Chief Operating Officer, and Mr Henk van Zyl and Mr Edward Ruheni as General Managers for South Africa and East Africa respectively
•    The Board of Directors was further strengthened during the year with the appointments of three new Independent Non-Executive Directors, including Ms. Angeline Greenwood in theUnited Kingdom, Ms. Hannah Wang’Ombe in Kenya, and Mr. Munyaradzi Murape in Zimbabwe.
•   During the 2023 financial year, the Company’s shares were admitted to trading on the Apex segment of the Aquis Stock Exchange, which represents the top 20% of Aquis listed companies. The Company’s plans to seek a listing of the Company’s shares on the AIM Market of the London Stock Exchange and a dual listing on the Nairobi Securities Exchange were unable to be completed during the year given the focus on the Company’s operations inSouth Africa and East Africa.

Post Period Highlights

The Company has continued to focus on delivering on its growth strategy in battery metals projects located in South Africa and East Africa, and subsequent to the end of the 2023 financial year, the Company has continued this progress with a number of additional new project acquisitions and significant development across its existing mine operations and development and exploration projects.  This includes:

•  The acquisition of an 80% interest in Agarwal Metals and Ores Limited (“AMO”), by the Company’s wholly owned Kenyan subsidiary, Muchai Mining Kenya Limited (“MMK”). AMO is the registered owner of the Kilifi Manganese Processing Plant located approximately 60 km from the Port of Mombasa in Kilifi County in Kenyaand which is a fully operational and permitted mineral processing plant capable of beneficiating approximately 10,000 tonnes per month of manganese ores.
•  The entering into of three manganese ore supply agreements for the supply of manganese ore to the Kilifi Manganese Processing Plant. These agreements provide the opportunity tooperate the Kilifi Manganese Processing Plant on a double shift basis over the next 6 to 12 months and with the potential to produce between 15,000 tonnes to 20,000 tonnes of saleable product per month.
•     The acquisition of a 100% interest in Northern Cape Lithium and Tungsten (Pty) Limited, by the Company’s wholly owned South African subsidiary,Southern African Lithium and Tantalum Mining (Pty) Limited. NCLTis the registered holder of Prospecting Right NC 30/5/1/1/2/13317 PR, which is contiguous to and immediately north of the Company’s existing operating Blesberg Lithium and Tantalum Mine.
•   The NCLT Prospecting Right comprises over 16 known tungsten deposits and former high-grade tungsten mining operations including the Kalbeen and Isis Tungsten Mines and the Koubank, Kaalbeen West and Armbank Tungsten Deposits, all of which are located within 5km to 10km of Blesberg. It also includes the Spodumene Kop II Pegmatite, located 6km from Blesberg, which was previously mined to shallow depths of just 5 metres (“m”) for its spodumene ore, tantalite and beryl and where historical non-JORC compliant resources have been identified down to initial depths of 30m.
•    The acquisition of a 51% interest in Mansena Kruisrivier Cobalt Pty Limited (“MKC”), by the Company’s wholly owned South African subsidiary, Muchai Mining South Africa Proprietary Limited. MKC is the registered holder of Prospecting Right LP30/5/1/1/2/13532PR, and which includes the historic Kruisrivier Cobalt Mine located in the Limpopo Province ofSouth Africa.
•   The Kruisrivier Cobalt Mine, is a former producing cobalt mine that operated intermittently for over 55 years up to the 1930s. Historical records confirm the presence of high-grade cobalt, gold, nickel, copper, chromium, zinc, lead, platinum and silver mineralisation as well production and sales of high-grade concentrates of cobalt ore of up to 16.67% cobalt and accompanied by exceptionally high-grade gold grades of up 68 grammes per tonne. Current non-JORC compliant historical resources of 733,000t of ore grading 8% cobalt have also been reported down to a depth of 200 metres.
•  The signing of a Mining Support Services Agreement, to secure an initial 60% interest in the Larisoro Manganese Mine, which extends over 2 mining permits held by Gems and Industrial Minerals Limited and which are located in Samburu County in Northern Kenya.
•    The Larisoro Manganese Mine is a conventional and shallow open pit mine which commenced operation in 2012 and has operated intermittently over the past 12 years and where the Company will look to expand production and increase sales.

Going Concern

The independent audit report draws attention to note 1 in the financial statements which indicates that the Group will need to raise additional funds to maintain sufficient cash flows. As stated in note 1, these events or conditions, along with other matters as set forth in note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. The auditor’s opinion is not modified in respect of this matter

Whilst acknowledging this material uncertainty, the Directors consider it appropriate to prepare the consolidated financial statements on a going concern basis for the foreseeable future, being a period of not less than 12 months from the date of approval of these financial statements, for the following reasons:

•  The Group has commenced mining and processing operations at the Blesberg Lithium and Tantalum Mine and is forecasting positive operating cashflow to be generated from that project in H2 2024;
•    The Group has commenced mine development and processing plant construction for the Larisoro  Manganese Mine and is forecasting positive operating cashflow to be generated from that project in  September 2024;
•  The Group has received committed funding from AUO Commercial Brokerage LLC of£2,500,000 to fund future exploration activities and corporate working capital requirements. This amount is sufficient to cover all budgeted discretionary expenditure;
•   The Group has secured additional discretionary funding from AUO Commercial Brokerage LLC that has been allocated towards additional exploration and development activities at the Blesberg Lithium and Tantalum Mine and at the Kinusi Copper Mine and Bagamoyo and Nyorinyori Graphite Projects, with AUO Commercial Brokerage LLC also indicating its continued financial support for the Group;
• The Group has received significant new “Bell” equipment and mobile plant in the form of excavators and haul trucks from Q Global Commodities to advance the production efforts at Blesberg Lithium and Tantalum mine.
•    The Group has no committed exploration expenditure on its granted mining licenses inTanzania at the Kinusi Copper Mine and Bagamoyo and Nyorinyori Graphite Projects and has the ability to reduce all spend in the event that it needs to conserve cash balances; and
•  The Group’s Board of Directors have significant experience in the debt and equity capital markets and specifically have a successful track record in funding mining operations, new mine development and exploration activities and are further considered capable of securing ongoing debt and equity capital financing for the Group.

Jason Brewer, CEO of Marula Mining, commented said:

“The 2023 was just the first full year of the Company’s battery metals focused mine development strategy in South Africa and East Africa.

“I believe we exceeded many of our initial expectations, but as the year progressed we clearly set new targets as it became apparent that our strategy was well supported by the investment community in the United Kingdom and by our many key stakeholders in South Africa and throughout East Africa.

“This was achievable through our investment partnership with Quinton van der Burgh’s group in South Africa and it is pleasing to have partnered with one of South Africa’s leading independent commodity, mining, logistics and investment funds. That in my mind is a clear endorsement of our strategy, our management team  and our underlying projects.

“We made significant progress at the Blesberg Lithium and Tantalum Mine and this despite terrible market conditions for lithium and in particular spodumene ores. Our strategy at Blesberg clearly needs to take on board the prevailing market conditions and to this end we have announced our focus on producing a higher value lithium product on site at Blesberg and I fully expect to see this progress rapidly over the reminder of this year.

“In Tanzania, through our partnership with Takela Mining Tanzania, we have identified what already appears to be a very significant copper mining and processing opportunity. Whilst I was pleased with the progress in 2023 with the high-grade copper assay results and Exploration Target of a 10-15 million tonnes deposit of high-grade copper, gold, and other base metals, with the potential to increase to in excess of 50Mt on completion of definitive resource drilling programs, I am disappointed that with such a strong copper markets we have not yet commenced export sales of copper. However we remain committed to achieving that this year and I look forward to updates on that shortly.

“Work at our extensive graphite interests in Tanzania in 2023 at the Bagamoyo, Nyorinyori and NyoriGreen Projects also demonstrate what a tremendous opportunity we have secured in one of the world’s fastest growing graphite mining and processing regions. With work on the next phase of exploration and resource drilling to commence shortly, I am confident that Marula will fast position itself as one of the major participants in the graphite sector.

“From a corporate perspective, 2023 saw the Company transform into one that had strong financial support through its partnership with Quinton van der Burgh’s group and which was then able to fast-track its corporate vision of being a mine operator and mine developer of multiple projects throughout South Africa and East Africa. Our executive management team and Board has been greatly strengthened throughout the year, but it is clear that if the Company is to continue to deliver on its goals and meet its targets of production, then further strengthening of its operating and administration team and its consultants and contractors will need to take place. And I am pleased to see what has been taking place over the past months to address this and I look forward to providing further updates on how the Company will ensure it is able to meet these targets going forward.

“Whilst 2023 has been a transformational year for the Company, 2024 has certainly taken off where 2023 finished.  Major progress continues to be made across its portfolio of battery metals projects and the Company’s ambitions are there for all to see with 4 key acquisitions already made at the Kruisrivier Cobalt Mine, the Northern Cape Lithium and Tungsten, the Larisoro Manganese Mine and the Kilifi Manganese Processing Plant, all of which have the potential to greatly enhance the mine production and cashflow generating capabilities of the Company.

“I would like to thank all the team of Marula here in Africa and its shareholders and key stakeholders for a year which has seen tremendous growth in the Company’s value, share price and in its underlying assets.  We are already well into 2024 and I look forward to seeing what we can achieve before its end.”

The Directors of Marula are responsible for the contents of this announcement. This announcement contains inside information for the purposes of UK Market Abuse Regulation.

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