Marula Mining Plc (AQSE:MARU) Half-year Report

Marula (AQSE: MARU), an African focused mining and development company, is pleased to provide its unaudited interim results for the six months ended 30 June 2023 (the “Period”).

Highlights

• Marula announced a investment and co-development agreement with Q Global Commodities Group (“QGC”), one of South Africa’s leading commodity, mining, logistics and investments funds
• Subscription agreement also signed with QGC for a multi-tranche equity investment of up to £3.75 million, subject to a Rule 9 Waiver being obtained in accordance with the City Code on Takeovers and Mergers and shareholder approval at a forthcoming general meeting of the Company
• Operations at the Blesberg Lithium and Tantalum Mine (“Blesberg’) progressed during the period and were focused on mine site infrastructure development; the sampling, processing and recovery of high-grade spodumene from the historic stockpile, and exploration focused on the hard rock potential across the prospecting right
• During the 6-month period to 30 June 2023, 21,425 tonnes (“t’) of material was loaded and hauled from the historic stockpiles at Blesberg, with 13,866t processed through the crushing and screening circuit and 16,011t of material in run-of-mine and product sized stockpiles
• Capital investment at Blesberg was completed during the period with the purchase of new mobile mining equipment from Bell Equipment made as part of the Company’s plans to increase production rates and recovery of high-grade spodumene over a 24-month period and for monthly sales of up to 1,500t of a +20mm high-grade lithium spodumene product
• Discussions advanced on new long-term lithium offtake agreements for the sale and purchase of 100% of the production of lithium product at Blesberg from the historic stockpiles and planned hard rock open pit mining operations
• Agreement signed with Takela Mining Tanzania Limited (“Takela”) to increase the Company’s interest in the high-grade Kinusi Copper Mine (“Kinusi”) in Tanzania from 51% to 75%
• Phase 1 Program of exploration activities at Kinusi completed over all of the 10 granted mining licenses, and the results confirmed the presence of a copper mineralised corridor extending for over 1 kilometre  (“km”) in strike length and 300 metres (“m”) wide and with high-grade narrow veins visually estimated to contain approx. 20% to 30% mineralised copper-bearing minerals which are mainly malachite and azurite
• Detailed design work, capital and operating costs for the copper processing plant was undertaken in South Africa during period, with initial mine feed to be sourced from small-scale mining focusing on the Takela 1, 2, 3, 4 and 12 pits at Kinusi
• Negotiations commenced with several parties for an initial copper offtake agreement for the sale and purchase of all copper and precious metals product produced from Kinusi from material processed through the planned new copper processing plant
• Agreement signed with Takela to secure a 75% commercial interest in the high grade Nyorinyori Graphite Project (“Nyorinyori”) that comprises 10 granted graphite licences and is located in the Simanjiro District, in the Manyara Region of Tanzania
• High-grade graphite mineralisation was observed at Nyorinyori, with visual estimates of +90% graphite content and jumbo graphite flakes identified in shallow and broad graphite veins and additional associated graphite mineralisation was observed across the mining licenses area at surface from numerous outcrops, extending over an initial strike length of over 2km
• Phase 1 Program of exploration activities completed across 18 of the 22 granted mining licenses that make up the Bagamoyo Graphite Project (“Bagamoyo”) in Tanzania and where the Company holds a 73% commercial interest
• Two graphite trends identified at the Mihuga and Saadan South Graphite Prospects at Bagamoyo, that extend for over 2km and where high-grade graphitic schist was observed with graphite grades of between 35% to 75% based on visible observations, and with several outcrops of graphitic schist and graphitic gneiss that occur with large graphite flake sizes visibly observed
• William Thompson appointed as Zimbabwe Country Manager and tasked with identifying advanced projects in the country
• A number of key management appointments were made during the period at both the corporate level at its headquarters in Nairobi and across its operational bases in East and Southern Africa.
• The Company confirmed its intention to seek a new primary listing of its ordinary shares in London and, during the period, appointed all key advisers
• In addition to a new primary listing in London, the Company also intends to complete dual listings of its shares on the Johannesburg Stock Exchange (“JSE”) and Nairobi Stock Exchange (“NSE”) and, during the period, advisers were appointed in South Africa and Kenya to manage this process
• During the period Brahma Finance (BVI) Limited converted the entire principal amount of the £265,000 of convertible loan notes that was secured by the Company in 2022 and, as a result of the conversion, the debenture held over Marula’s assets was discharged, and the Company was able to confirm that it was debt free at the time and no security had been pledged over any of its assets
• A total of 11,242,500 warrants, with a strike price of 4 pence were exercised during the period, which raised £449,700 of gross proceeds through the issue of 11,242,500 new ordinary shares

Post Period Highlights

• Continued investment in Blesberg’s mining and processing operations with additional new mobile mining equipment secured and two sensor based XRF Ore Sorters purchased from Tomra Systems ASA and Rados International Technologies (Malta) Limited that are to be installed and commissioned in Q4 2023 as part the proposed expanded processing facilities at Blesberg that, in addition to new crushing and screening equipment, is planned to increase the production capacity of high-grade spodumene ore to over 1,000 tonnes per month (“tpm”) of saleable product
• Commencement of an approx. ZAR 26 million (approx. US$1.35M) resource drilling, exploration and mine planning program at Blesberg
• Independent sampling and assaying of processed spodumene material at Blesberg was completed, which confirmed high-grade spodumene product with an average grade of 6.5% Li2O and a contract for an initial trial shipment of 27.5 tonnes of this material was signed with a Chinese importer and exporter of metalliferous ores for sales to be sold at US$3,000/t
• At Kinusi, the final report from the Company’s independent geological consultants on the Phase 1 Program of exploration activities was completed and which confirmed the preliminary findings of the identification of a copper mineralised corridor in excess of 1km in length and 300m wide.  The assays results remain outstanding as at the date of this report
• In South Africa, the Company’s mineral processing contractors completed construction of the initial modular copper processing plant, that will be transported, installed and commissioned at Kinusi in Q4 2023
• At Nyorinyori, the Company’s independent geological consultants have been engaged to commence a Phase 1 Program of exploration activities which will include sampling, mapping and trenching work across the 10 granted mining licenses
• Assay results were received on samples taken from Bagamoyo and these results confirmed the high-grade nature of the graphite mineralisation there and in particular at the Mihuga Prospect where high-grade samples included 19.71%, 19.33%, 15.65%, 10.92% and 9.13% and medium to coarse  graphite flakes were identified in a number of samples
• At the corporate level, the Company continued to strengthen its Board of Directors and appointed Ms. Angeline Greenwood, Ms. Hannah Wang’Ombe and Mr. Munyaradzi Murape as Non-Executive Directors and re-appointed Mr. Richard Lloyd as both Chairman of the Board and Executive Director of the Company, with both Marc Nally and Ian Harebottle stepping down as Non-Executive Directors
• The Company shares were admitted on to the Apex segment of the AQSE Growth Market (“AQSE”), which represents the top 20% of AQSE listed companies and provides access to a greater number of institutional investors.

 Jason Brewer, CEO, said:

“The first half of the 2023 year has further demonstrated what Marula is capable of delivering, as demonstrated by the progress that has been made at the Blesberg Lithium and Tantalum Mine and also at the Kinusi Mine which has the potential to be our second producing asset by the end of the year. Our strategy is clear and it remains one of continuing to invest in rapid growth opportunities in the battery metals sector here in East and South Africa.

“The major investment and co-development agreement with Q Global Commodities, who are one of South Africa’s leading commodity, mining, logistics and investments funds, is transformational for the Company. It really has allowed us to move forward at pace and in delivering on our strategy across our portfolio of projects.

“Whilst we have successfully advanced our mining and processing activities at Blesberg, we have not held back elsewhere, with good progress being made at the Kinusi Copper Mine, which continues to reinforce our decision earlier this year to increase our commercial interest in the project from 49% to 75%, and where the board anticipate that, with the modular processing plant arriving on site in the coming quarter, we will start to see copper production before the end of 2023. Likewise, the positive exploration results that we are achieving at our Nyorinyori and Bagamoyo graphite projects in Tanzania, demonstrates the potential of these.

“With our battery metals focus and strategy expanding, we established subsidiaries in Zimbabwe and Kenya to look for multiple near-term assets in these critical metals sector. We will continue to look for growth opportunities and develop potential assets. It is also important to us that our focus remains on the critical mineral space, as we believe this to be a pivotal time in the transition to a green economy.

“I am pleased with the progress we have made in the first six months of 2023, and I look forward to seeing what we can accomplish in the future.”

For further information, please visit www.marulamining.co.uk or contact:

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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