MARU has increased its stakes in key projects and now counts both Southern Jade Resources and Q Global Commodities Group as backers. And its AIM listing is approaching.
By: Charles Archer
Marula Mining (AQSE: MARU) was my top growth stock pick for 2023 when I published my original speculative investment case on 6 December. At the time, I suspected that it would take roughly six months for the market to wake up to MARU’s potential, with a share price reflective of its assets after its FTSE AIM listing.
But while this listing is still scheduled for the end of Q1, the share price has already more than trebled. This increase is reflective of progress made by CEO Jason Brewer — indeed, on 5 January, MARU argued that the ‘increased level of interest’ was a result of ‘broad market commentary on the positive market fundamentals.’ It’s nice to be the early bird.
Marula Mining PLC Chief Executive Officer Jason Brewer talking to Share Talk during a London visit
For context, the AQSE market is unregulated — so a listing on AIM could act as a catalyst by itself. Brewer seems to acknowledge this, noting that a listing on the London Stock Exchange’s AIM market should prove to be transformational for the Company… a listing on AIM is in line with this strategy as we continue to reach milestones, and seek out exposure to a larger pool of investors.’
@MarulaPlc Sell:8.50p Buy:9.00p ⤴️ 0.47p (+5.76%) @ZaksTradersCafe BBH target still stands, initial target 10p looking good, 9.65p peak high, looking for 14p hopefully over the coming weeks! #MARU 1 week: +37.5% https://t.co/P08c8155Uw https://t.co/udYY9p1Pp1 pic.twitter.com/lEcqZIf2hc
— Share_Talk ™ (@Share_Talk) March 1, 2023
Ticking all the boxes
As a firm believer in the clean tech/EV revolution, I have spent much of the past year emphasising the importance of investing in early-stage small-cap explorers in the lithium, copper, graphite, and rare earths sectors.
The basic premise of this investing strategy is fairly simple to understand. The larger legacy assets are drying up. Demand for clean energy materials is set to rocket. And larger companies riding high on the mining supercycle are looking for acquisitions with proven assets — specifically in Africa where competition between western and Chinese investors is set to create bidding wars.
Investors looking at the trajectory of lithium prices over the past few years would do well to also consider whether the same supply gap is starting to open up over copper, graphite, and rare earths.
Marula was once known as All-Star Minerals, before renaming itself on 1 July last year — after the popular African fruit responsible for the kick in Amarula. It identifies and targets investments in advanced and near-term production within Africa’s mining sector. And it focuses specifically on battery metals and green-critical commodities.
What remains key to me is MARU’s diversification across both mineral types and geography. It operates the Blesberg Lithium and Tantalum Mine in South Africa, the Nkombwa Hill Niobium, Tantalum, Rare Earths and Phosphate Project in Zambia, and the Kinusi Copper Project and Bagamoyo Graphite Project, both located in Tanzania.
That’s all four of my favourite critical minerals across three countries, all with a strong history of Chinese investment. Of course, one of the key issues with African miners is the volatile political environment of many African nations, but this is de-risked with MARU.
It also helps that CEO Jason Brewer is a working machine — frequently zipping between chats in London and getting his hands dirty in Africa.
It’s worth noting that despite recent developments, Blesberg remains MARU’s flagship, 100% owned asset having spent $1.7 million on increasing its stake from 5% last year. This cash was part of a $5 million advance from an agreement with Southern Jade Resources Pty Limited, a South African-based subsidiary of global commodity group Traxys SARL, to be held against sales of high-grade lithium from existing stockpiles at the project. These stockpiles will produce a ‘high-grade lithium ore with commercial grades of between 4.00% and 5.50% Li2O.’
On 24 January, MARU announced that the first 1,000 tonnes of lithium ore were to be delivered over the next four weeks after processing operations began in late November. Feasibility study work to potentially establish a long-term, hard rock conventional open pit lithium mining operation will be underway shortly.
Then on 31 January, Marula announced a strategic investment and co-development partnership with Q Global Commodities Group, one of South Africa’s leading commodity, logistics and investment funds. CEO Quinton van der Burgh believes that ‘Marula has potential, and we intend to assist the Company in meeting its growth targets.’ For context, the company has the network of international partners that Marula had up until this point lacked.
The agreement is that Q Global will subscribe for up to £3.75 million through the issue of up to 100,000,000 new ordinary shares across five equal traches of equity investment, and that van der Burgh will be appointed as Marula’s Chairman. The announcement was followed by a signed co-development and relationship agreement shortly thereafter.
Brewer enthuses that the news is ‘transformative and means we can accelerate and further develop the assets we have and invest in further assets that we have identified…we now have the ability to implement our exploration plans, resource drilling programs, feasibility studies and development work across our projects.’
He didn’t take long to get started.
On 17 February, Marula announced it had entered into a binding heads of agreement with Tanzanian mining company, Takela Mining Tanzania Limited, to secure a 75% interest in 10 granted graphite licences that make up the Nyorinyori Graphite Project, for a total consideration of up to £400,000 through staged equity payments (subject to certain milestones being achieved). Valid through to February 2030, these licences are contiguous and extend over a combined area of circa 86 hectares.
Then on 20 February, Marula amended the terms of its agreement with Takela to increase its interest in the 10 granted mining licenses that comprise the Kinusi Copper Project in central Tanzania, from 49% to 75% through cash and staged equity payments worth a total of $550,000.
Kinusi includes 10 primary mining licences valid to September 2029 that extend over 91 hectares, with 8 of the licenses contiguous. And the project boats reported copper grades of 7.28%, 19.12%, and a whopping 31.32% using a hand-held XRF.
Brewer has now secured $5 million in funding from a subsidiary of Traxys SARL, and £3.75 million from Q Global Commodities Group. Quinton van der Burgh is one of South Africa’s wealthiest investors, and Marula now has huge interests in multiple promising battery metals projects across the continent.
And when the AIM listing comes, Marula Mining could bear further fruit.
By: Charles Archer
This article has been prepared for information purposes only by Charles Archer. It does not constitute advice, and no party accepts any liability for either accuracy or for investing decisions made using the information provided.
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