Shuka Minerals Plc (AIM & AltX: SKA), an African-focused mine operator and developer, announces its audited results for the year ended 31 December 2024.
The 2024 Annual Report and Accounts is being posted to shareholders and will shortly be available on the Company’s website at: https://www.shukaminerals.com/circularreports.
CHAIRMAN’S REPORT
In the year ending 31 December 2024, the Company continued its transition in terms of management with a refocus on future strategy and direction and board changes. During this continued period of change Richard Lloyd joined as the new Chief Executive Officer (13/12/24) and Edward Ruheni as a Non-Executive Director, and the Company accepted the resignations of directors Noel Lyons, Paul Ryan and Allan Zimbler, we thank them for their efforts and wish them well in their future endeavours. Jason Brewer also resigned as a Director but continued as a consultant through Gathoni Muchai Investments (“GMI”) . The ongoing refocus of the Company has continued into the first half of 2025 with a further major strategic financial commitment to the Company by GMI, subject to final documentation, and the extension of the availability of the AUO Commercial Brokerage LLC (“AUO”) convertible loan note by 12 months to March 2026, as well as,material progress on a potential acquisition.
GMI is a Nairobi-based investment firm focused on mining, property and retail sectors and headed up by Jason Brewer and Ms Jackline Muchai. GMI have existing investments in four East African countries, including Tanzania and are a major shareholder in battery metals focused mining company Marula Mining plc and in Neo Energy Metals plc, each London-listed. GMI has a current 20.9% shareholding in Shuka Minerals. Shuka’s other major shareholder, AUO, led by myself, has a current interest in 28.2% of the Company’s issued shares.
On site in Tanzania, the Rukwa coal mine experienced continued production and output challenges as has been the case historically with this coal asset. However, a sufficient amount of investment, from a further drawdown of the £500,000 GMI loan , is earmarked for H2 2025 and a restart, in mining operations, is expected very soon. Production in 2024 amounted to 63 tonnes of washed coal only this volume is set to be used to retest and restart the wash plant and will then be sold. 60,000 tonnes of “fines” are stockpiled on surface and we hope to achieve a sales price of USD7-8 per tonne for this material which will generate valuable cashflow. A tight rein continues to be kept on costs and we were pleased to have resolved the legacy dispute with the Upendo Group .
A further funding commitment was entered into with GMI on 2 December 2024 with an unsecured, non-convertible, interest free loan of £500,000, £335,000 of which has been drawndown to date. This has been agreed to be further extended by an extra £1.5m, subject to completion of the Company’s due diligence and signing of definitive funding documentation, post period, in order to complete the acquisition of Leopard Exploration and Mining Limited (“LEM”) . LEM is the registered holder of a large-scale mining license 12848-HQ-LML issued in December 2014 for a period of 25 years which includes the world famous Kabwe Lead-Zinc-Silver-Vanadium mine in central Zambia (“Kabwe Mine”) approx.110km north of the capital city of Lusaka.
On 24 May 2024 the Company announced that it had completed due diligence on the Kabwe Mine and was proposing to proceed with the acquisition of LEM. This work, included independent technical and legal reports, and demonstrated a technically robust and attractive acquisition opportunity of the Kabwe operation (the “Project”) which has a long history of mining and processing operations (1904-1994) of base and precious metals. The Project’s historical non-JORC compliant resources have been independently verified by the Company’s retained technical experts Behre Dolbear meeting NI 43-101 reporting requirements and which have an in-situ value of approx. US$4 billion based on then prevailing London Metal Exchange prices. Preliminary economic analyses of the Project have estimated pre-tax cashflow of US$1.84 billion, NPV10 US$0.56 billion and an IRR of 112% based on the development of two of the five existing resources.
On the same date the Company was pleased to announce that it had entered a £2 million unsecured convertible loan note (“CLN”) agreement with AUO. The availability of the CLN was extended in March 2025 for a period of 1 year to March 31st 2026 and repayment / conversion also extended to March 31st 2027. While AUO was previously unable to provide the requested funding, on behalf of AUO I can confirm that we remain committed to meeting its obligations under the CLN if required. The proceeds, if successfully drawn, will either be applied towards future acquisition opportunities, including LEM, or for general working capital purposes.
A conditional share purchase agreement (“SPA”) was entered into between the Company and LEM in December 2024, to acquire 100% of LEM’s share capital.
The Kabwe Mine, was previously operated by Anglo American plc and Zambia Consolidated Copper Mines Limited, and was mined continuously for 90 years until its closure in 1994, due to the then prevailing commodity prices. It was ranked as one of the world’s highest-grade zinc and lead mining operations and is considered one of the most famous mines in Africa, holding a position of national economic importance in Zambia.
Subject to completion of the Acquisition and to securing the requisite funding, the Company will commence a 3-phase exploration and development program at the Kabwe Mine, as part of its plans to re-commence both open-pit and underground mining and processing operations.
2024 was certainly a challenging period for the Company on the ground from an operational perspective but outweighed by the strong steps taken to refocus the Company for the future. We believe that the continued and anticipated funding support by major shareholders, together with the investment strategy outlined above, will lead to a successful period for the business in 2025 and beyond.
I would like to extend my gratitude to all our stakeholders and former board directors and to Richard Lloyd for taking on the role of CEO and redirecting the Company with the conditional purchase of the Kabwe asset, planned restarting Rukwa and a successful secondary listing on the AltX exchange of the Johannesburg Stock Exchange (“JSE”). Thanks also goes to Jason Brewer, who stepped down during the period though of course remains as a consultant, for his contributions to the Company.
Yours Sincerely,
Quinton Van Der Burgh
Chairman
27 June 2025
CHIEF EXECUTIVE OFFICER’S REPORT
The past year, 2024, had a continued period of refocus for our Company and its future direction. The vision for further growth beyond coal, whilst maximizing the value of Rukwa continues. I only joined the Company at the very end of the reporting period so will focus on the initiatives that were in place and which I have been able to either complete or progress with the team. The focus for 2025 and beyond is key.
Board
I joined the board as the new CEO in December 2024 together with Edward Ruheni who joined as an NED, joining Marc Nally the Independent NED. Jason Brewer, whilst resigning as a Director, remains as a consultant through Gathoni Muchai Investments (“GMI”) and has been extremely supportive both from the funding and strategic basis. The ongoing refocus of the Company has continued into the first half of 2025 with a further major strategic financial commitments to the Company by GMI, and the extension of the availability of the AUO Commercial Brokerage LLC (“AUO”) convertible loan note by 12 months to March 2026.
I hope to make further board appointments with technical capabilities in order to progress our operations and strengthen the board.
In December 2024 Noel Lyons, Paul Ryan and Dr Allen Zimbler resigned as Directors of the company. As part of the settlement agreement Noel Lyons and Paul Ryan received £128,750 and £112,381 respectively in lieu of contractual notice period. Both were also awarded bonuses of £125,000 each. The company was grateful that £190,313.25 of the cash sum due to Noel Lyons and £178,036 of the cash sum due to Paul Ryan under their Settlement Agreements were paid by the issuance of 2,584,583 new Shuka Shares (the subscription price calculated using a 30 day VWAP) to Noel. Lyons and 2,417,850 new Shares to Paul Ryan. The majority of the cash balance has now been settled.
In addition Noel Lyons and Paul Ryan were awarded 2,000,000 warrants each and Dr Allen Zimbler was awarded 250,000 warrants (see Note 27).
Operations
The Rukwa coal mine in Tanzania, operated by Shuka owned subsidiary Edenville International Tanzania Limited (“EITL”), has faced challenges throughout the year, and has been managed on care and maintenance basis. However, a positive reassessment of the potential for the Rukwa mine as well as various joint venture discussions has resulted in a restart budget capex of c.USD150k in order to return the mine to a targeted production rate of 4,000-5,000 tpcm by Q3 2025, depending on when funding is secured. New equipment will be purchased or leased, the wash plant tested and restarted and sales will re- commencet.
Strategic partnerships with large cement manufacturers continue to be discussed. There is interest in buying Rukwa’s entire coal output, to a maximum 10,000 tonnes per month. EITL will need to prove its ability to produce a minimum of 4,000 tonnes per month uninterrupted. As mentioned this will require some investment in capital and equipment.
In February 2024, the Company signed a definitive settlement agreement with Upendo Group who hold a historic residual 10% interest in the Rukwa coal mining licence. The settlement granted an immediate payment to Upendo Group of USD 110,000. Upendo will also earn a royalty of $1.95 per tonne of coal from Rukwa sold. Positive conversations have continued in 2025 with the new board and Upendo regarding the operations restarting.
Kabwe / LEM acquisition
The Kabwe Mine, was previously operated by Anglo American plc and ZCCM from 1904-1994. It is one of the world’s highest-grade zinc and lead mining operations and has also produced significant amounts of Silver and Vanadium oxide, and contains other rare earth minerals such as Gallium and Germanium. Early testing of surface samples from my recent visit returned grades of 15 to +30% Zn.
The Company completed due diligence on the Kabwe Mine and signed a conditional share purchase agreement (“SPA”) with Leopard Exploration and Mining Ltd in December 2024 which is scheduled to complete no later than 30 June 2025. The SPA anticipates the acquisition of 100% of LEM’s share capital. LEM is the registered holder of a large-scale mining license 12848-HQ-LML issued in December 2014 for a period of 25 years, covering the Kabwe Mine and surrounding area of 33sqkm.
Final authorisation has been approved by the Board of Commissioners of the Competition and Consumer Protection Commission (“CCCPC”) for the acquisition of LEM.
The Company also agreed terms on a £1.5 million non-dilutive and unsecured facility, subject to completion of the Company’s due diligence and signing of definitive funding documentation, to provide funding for the $1.35m balance of cash consideration due to the LEM vendors.
Following receipt of the final regulatory approval noted above, the Company has agreed the terms of an addendum to the SPA, subject to documentation, whereby the principal LEM vendors have agreed that the share consideration for the Acquisition, being $3.0 million, shall be settled on completion of the Acquisition through the issue of 28,640,042 new ordinary Shuka shares (“Consideration Shares”), with no deferred consideration shares, equivalent to an issue price of 7.737p per share (being a 10% discount to an agreed reference price of 8.5965p under the terms of the SPA), a significant premium to the current market price.
The Consideration Shares will represent, upon issue, 29.99% of the Company’s enlarged issued share capital.
As compensation for the issuance of the Consideration Shares upon completion, with no deferred consideration shares, the Company has agreed to issue LEM with a further 2,000,000 warrants with an exercise price of 12.5p and expiry date of 31 December 2027, subject to the LEM vendors not holding post exercise, in aggregate, over 29.99% of the Total Voting Rights.
The Company have also met with and engaged GeoQuest and discussed its preliminary exploration plans and mine development strategy for the Kabwe Mine. GeoQuest is a fully independent geological and environmental consultancy and contract services group. GeoQuest’s principals are well known by the Company’s CEO and NED Marc Nally. As part of their initial phase of work they will complete a review of some of the historical resource drilling and exploration work completed at the Kabwe Mine and complete a geophysical survey of the Kabwe Mine and existing Mining License.
Behre Dolbear’s NI 43-101 Competent Persons report is an extremely valuable starting point for the analysis of the Kabwe Mine. Preliminary economic analyses of the Project have estimated pre-tax cashflow of US$1.84 billion, NPV10 US$0.56 billion and an IRR of 112% based on the development of two of the five existing resources.
A 3-phase program, as recommended by Behre Dolbear, will comprise:
(i) a high-resolution geophysical survey,
(ii) a JORC Code 2012 resource drilling program, updated metallurgical test work and additional environmental and mining studies; and
(iii) detailed feasibility study work and underground mine refurbishment and new access decline activities as well as the establishment of new ore processing facilities and project value addition in respect of the production of refined metals products.
Funding
A funding commitment was entered into with GMI on 2 December 2024 for an unsecured, non-convertible, interest free loan of £500,000. The Company has agreed extended terms on an extra £1.5 million non-dilutive and unsecured facility, subject to completion of the Company’s due diligence and signing of definitive funding documentation, in order to complete LEM acquisition (as noted above).
The £2m AUO Investments (Dubai) (“AUO”) convertible loan note was extended by 12 months to March 2026, with repayment also extended 12 months to Marh 2027, which has also given the Company a possible further financing option. As previously announced, while the funding was not provided when requested in 2024, AUO has confirmed that it intends to honor its commitments under the CLN should it be called upon to do so.
The proceeds of the above facilities will be applied towards the cash element of the LEM acquisition, or other future acquisition opportunities, and for general working capital purposes.
The Company continues to assess the long outstanding debt owed by the Envirom Group with debt collectors in Norway and is evaluating the potential for a successful claim.
Corporate Social Responsibility
The Company remains committed to fulfilling its corporate and social responsibilities (“CSR”). We recognise the importance of meeting social requirements as an operator in Tanzania. The construction of the mining operation at Rukwa has already led to improvements in local infrastructure, most notably the construction and maintenance of a road from Kipandi to Mkomolo village and beyond, benefiting farmers, the local population, and the mine itself. We have also continued to prioritise the employment of local individuals from surrounding villages, resulting in highly competent and skilled employees. The positive social impact extends to the broader community, where enterprising individuals are providing services such as food supply for workers.
The CSR responsibilities in and around Kabwe with an historic, 100+ year old mine and local operations will be challenging but Shuka have already engaged local officials and representatives and will have a well thought out plan and study in place before any operations commence.
Post Period Events
In May 2024 the Company entered into a £2 million unsecured convertible loan note agreement (“CLN”) with AUO Commercial Brokerage LLC (“AUO”), a wholly-owned subsidiary of Q Global Commodities Group (“QGC”), which is led by Quinton Van Den Burgh, the Company’s Chairman. AUO has a current interest in 29.2% of the Company’s issued shares.
On 4 April 2025 the availability of the entire principal amount was extended to 31 March 2026, including the drawdown date and redemption date was extended by 12 months to 31 March 2027.
The loan notes attract an interest of 3% per annum and are convertible at 15p per share at any time up to 31 March 2027.
On 7 May 2025, 1,625,000 new ordinary shares of 1p each were issued at a price of 8 pence per share in lieu of £130,000 of consultancy fees due to Gathoni Muchai Investments Limited, £70,000 of which were outstanding at the year end.
On 21 May 2025, the Company commenced its secondary listing on the AltX market of the Johannesburg Stock Exchange
On 11 June final authorization was approved by the CCCPC for the acquisition of LEM.
The Company also agreed terms on a £1.5 million non-dilutive and unsecured facility, subject to completion of the Company’s due diligence and signing of definitive funding documentation, to provide funding for the $1.35m balance of cash consideration due to the LEM vendors.
Following receipt of the final regulatory approval noted above, the Company has agreed the terms of an addendum to the SPA, subject to documentation, whereby the principal LEM vendors have agreed that the share consideration for the Acquisition, being $3.0 million, shall be settled on completion of the Acquisition through the issue of 28,640,042 new ordinary Shuka shares (“Consideration Shares”), with no deferred consideration shares, equivalent to an issue price of 7.737p per share (being a 10% discount to an agreed reference price of 8.5965p under the terms of the SPA), a significant premium to the current market price.
The Consideration Shares will represent, upon issue, 29.99% of the Company’s enlarged issued share capital.
As compensation for the issuance of the Consideration Shares upon completion, with no deferred consideration shares, the Company has agreed to issue LEM[, following completion,] with a further 2,000,000 warrants with an exercise price of 12.5p and expiry date of 31 December 2027, subject to the LEM vendors not holding post exercise, in aggregate, over 29.99% of the Total Voting Rights.
Summary and Outlook
We have a new and focused executive management team with strong technical capabilities. Our investors bring extensive finance, and technical expertise in the mining business on the African continent. The LEM acquisition, once completed, and Kabwe project are huge milestone in Shuka’s growth and a Company changer. Furthermore, with an expected improved cash and funding position, subject to completing funding, we will continue to target additional asset acquisitions, leveraging the natural resources and capital markets expertise of the Board and the significant shareholders.
I am firmly behind the future of Shuka and strongly believe that the future is bright, both for the remainder of 2025 and beyond, with confidence in its potential to generate shareholder value. The efforts made already in my short tenure have provided strong results and a positive share price trend. The JSE listing was a great success and opens the path to new and supportive investors.
Richard Lloyd
Chief Executive Officer
27 June 2025
