Shuka Minerals Delays Zambia Mine Acquisition After GMI Funding Fails to Arrive
Shuka Minerals Faces Further Delay in Zambia Acquisition as Financing Partner Misses Payment Deadline
Aim- and AltX-listed Shuka Minerals has announced another delay in completing its planned acquisition of Leopard Exploration and Mining (LEM) and the Kabwe zinc mine in Zambia, citing late payment from its financing partner, Gathoni Muchai Investments (GMI).
In a statement issued on November 3, Shuka said that despite written confirmation from GMI, the $1.35 million balance of the cash consideration due to the LEM vendors had not yet been received.
GMI had initially advised that payments would be made by October 31, but later informed Shuka that administrative issues had caused a delay. The investment firm has since indicated that the payments are expected to commence this week.
Shuka noted it remains in regular contact with GMI regarding the status of the funds.
“It is disappointing to be reporting a further delay, though we have been assured by GMI that funding to allow the completion on Kabwe will soon be provided,” said Shuka CEO Richard Lloyd.
“The company remains committed to finalising the acquisition using the non-dilutive and favourable terms available under the GMI facility, rather than pursuing alternative sources of funding.”
The company added that the LEM vendors remain supportive of completing the transaction once the outstanding payment is made, along with the issuance of consideration shares and additional warrants. The deal will also require the formal transfer of LEM shares to Shuka.
However, Shuka acknowledged that its financial position remains tight as it awaits both the GMI funds and proceeds from the planned sale of stockpiled material at its Rukwa operation in Tanzania.
Previously, the company reported that about 60,000 tonnes of fines were stockpiled at Rukwa and expected to sell for $7 to $8 per tonne. Negotiations with potential buyers are still ongoing.
Pending the receipt of these funds, Shuka confirmed it currently has limited cash resources. Nonetheless, the board believes that, with the support of creditors, the company’s existing resources will be sufficient to cover near-term obligations.
