Kazera Global PLC (AIM:KZG), the investment company, has signed a binding production sharing agreement with South African mineral processing group Rare Earth Minerals International (REMI) for its Walviskop heavy mineral sands project in the Northern Cape.
Shares in Kazera rose 23% to 1.26p following the announcement.
Under the 50/50 deal, which takes effect from 1 June and runs for an initial 12 months, REMI will deploy a processing plant and infrastructure with an estimated replacement value in excess of £1 million at the site, with no upfront capital cost to Kazera.
REMI will also make a monthly operational funding contribution of around £27,000 towards project costs, materially reducing Kazera's near-term working capital requirements.
The company is targeting production of approximately 10,000 tonnes of processed heavy mineral sands per month by the end of the third quarter of 2026, with a longer-term objective of reaching 20,000 tonnes per month.
Work is already underway to improve concentrate grade towards a minimum of around 40% titanium dioxide content, which Kazera believes will materially improve product saleability and pricing.
The agreement is expected to provide an operational platform ahead of the anticipated grant of a 2A Mining Right, which could significantly increase future mining volumes and scale.
A competent person's report for the 2A area is expected to be shared in late June.
Richard Jennings, interim chief executive, said the agreement represented a potentially pivotal moment for Kazera, adding that REMI's economics are directly aligned with the company's and driven by production success.