Marula Mining PLC - Acquisition of Majority Interest in Cobalt Mine

Marula Mining PLC

("Marula'' or the "Company")

10 July 2024

Acquisition of Majority Interest in High-Grade Historic Cobalt Mine in South Africa

Marula Mining (AQSE: MARU A2X: MARU), an African focused mining and development company, is pleased to announce that through its wholly owned South African subsidiary, Muchai Mining South Africa Proprietary Limited, ("MMSA"), it has signed a binding term sheet ("Term Sheet") with South African mining company Mansena Cobalt Proprietary Limited ("MC") to acquire a 51% shareholding in Mansena Kruisrivier Cobalt Proprietary Limited ("MKC").

MKC is the registered holder of Prospecting Right LP30/5/1/1/2/13532PR, which extends over 2,340.90 hectares of the Kruisrivier 74 JC Farm located in the Elias Motsoaledi District of Limpopo Province in South Africa and which includes the historical Kruisrivier Cobalt Mine (the "Project" or "Kruisrivier Cobalt"). MKC has lodged a Mining Permit application, which has been accepted and is expected to be issued in due course.

Kruisrivier Cobalt, is a former producing cobalt mine that operated intermittently for over 55 years up to the 1930s. Historical records confirm the presence of high-grade cobalt, gold, nickel, copper, chromium, zinc, lead, platinum and silver mineralisation as well production and sales of high-grade concentrates of cobalt ore of up to 16.67% cobalt and accompanied by exceptionally high-grade gold grades of up 68 grammes per tonne ("g/t"). Current non-JORC compliant historical resources of 733,000t of ore grading 8% cobalt have also been reported down to a depth of 200 metres ("m").

Due diligence work completed by the Company and its technical team has confirmed the presence of visible high grade cobalt mineralisation and which has been identified at surface in waste stockpiles and in the shallow underground workings in narrow veins and lenses of cobalt ore of between 0.5m and 4.0m in widths. The cobalt mineralisation occurs as a cobalt arsenate deposit with both safflorite, and erythrite. Independent assay results on samples taken in Q4 2023 reported 8.31% cobalt, 0.81% nickel, 323g/t molybdenum and 164g/t gold and also 2.73g/t palladium, 0.16g/t platinum, 1.91g/t rhodium and 86g/t gold.

Under the commercial terms of the Terms Sheet, the Company will now issue £100,000 of 1,000,000 new ordinary shares at a price of 10 pence per share ("MKC Shares") and then make a further cash payment of £100,000 on completion of final due diligence. The Company will also fund 100% of the costs to complete an updated bankable feasibility study, as well as pay a monthly management fee of ZAR100,000 (approx. £4,300) to MC until completion of the feasibility study. On the earlier of 12 months from signing of the Term Sheet or a decision to mine, the Company will issue a further £200,000 of ordinary shares at a price of 10 pence per share and pay a cash fee of US$1,700,000.

Highlights:

·    agreement signed for Marula's South African subsidiary to acquire a 51% majority interest in Kruisrivier Cobalt

·    the acquisition further strengthens Marula's expanding operational and development stage strategic battery metals portfolio in Africa

·    Kruisrivier Cobalt is located 180 kilometres northeast of Johannesburg on a granted Prospecting Right

·    the area benefits from excellent road access and associated infrastructure

·    Kruisrivier Cobalt is a former producing cobalt mine that operated intermittently from its discovery in the 1870s for over 55 years up to the early 1930s

·    records confirm the presence of high-grade cobalt, gold, nickel, copper, chromium, zinc, lead, platinum and silver mineralisation

·    the geology of Kruisrivier Cobalt and the adjoining area has been researched in detail in South Africa, and includes a portion of a small norite protuberance on the eastern rim of the Bushveld Complex

·    several xenolithic bodies of Pretoria group quartzite and shale occur within this, with the largest and most southerly of these masses dipping at an angle of 50 to 60 degrees to the south and with the cobalt ore associated parallel to the quartzite bedding plane

·    visible high grade cobalt mineralisation has been identified at surface and in the shallow underground workings by MC and as part of the Company's detailed due diligence

·    outcropping cobalt ore of erythrite and heterogenite was previously mined out over a length of approx. 120m to an average width of 1.1m, although in places widths of up to 4.0m was mined

·    at the southwest end of the outcropping ore, an inclined shaft was sunk, with drives on two levels onto the cobalt mineralisation and additional sub-shafts and associated underground infrastructure to mine out stopes to depths of up to approx. 40m

·    the historic underground mine infrastructure is now largely inaccessible, other than a decline dipping at approx. 45 degrees and from which the Company was able to complete inspection of the visible underground high-grade cobalt mineralisation

·    historical production and sale of cobalt rich concentrates (without any mineral processing) with reported cobalt grades of 15.34% and 16.67% and gold grade 68g/t gold were made up until the early 1930s

·    since 2022, MC has been completing exploration work on Kruisrivier Cobalt and has determined a current non-JORC compliant historical resources of 733,000t of ore grading 8% cobalt down to a depth of 200m increasing to 1.5 million tonnes of ore grading 8% cobalt down to 500m

·    numerous occurrences of cobalt mineralisation have been observed across the Kruisrivier Cobalt area and surrounding area

·    the Company's technical team has completed a detailed due diligence review of Kruisrivier Cobalt which also included an assessment of historical data and information as well as a site visit in April and May 2024;

·    assay results on samples taken in Q4 2023 and independently assayed has confirmed the presence of high-grade cobalt and other high value commodities including:

·    8.31% cobalt, 0.81% nickel, 323g/t molybdenum and 164g/t gold; and

·    86g/t gold, 2.73g/t palladium, 0.16g/t platinum and 1.91g/t rhodium for a combined 91.00g/t 4E PGM.

·    the Company will, under the Term Sheet, complete a detailed and systematic exploration program and detailed geological investigation to confirm previous extensive historic data and establish a JORC compliant mineral resource

·    this exploration work will include satellite multispectral analyses, airborne geophysics, surface and underground rock chip, channel sampling, resource drilling and core analyses

·    further work will include the completion of a bankable feasibility study that will incorporate detailed process mineralogy, extractive metallurgy, and process development studies which will include either pyrometallurgical or hydrometallurgical processing routes given the mineralisation

·    additionally, Marula will cover the costs for processing plant design and establishment, mining studies and plans as well as any subsequent permitting and approval processes, as well as pay a monthly management fee of ZAR 100,000 (approx. £4,300 to MC) until completion of the feasibility study

·    the Company plans to complete all the necessary technical studies to complete a bankable feasibility study over the next 12 months

·    the acquisition of a majority interest in Kruisrivier Cobalt is considered strategically important and provides the Company with a high-grade and brownfield cobalt project opportunity which has demonstrated cobalt grades significantly higher than those found in the African Copperbelt and in the Democratic Republic of Congo, which accounts for the majority of the world's cobalt production and reserves

·    completion of the final due diligence by the Company and execution of a formal share sale and purchase documentation for its interest in MKC, is expected to be completed in Q3 2024.

Admission

Application has been made for the MKC Shares to be admitted to trading on the Aquis Stock Exchange Growth Market and A2X Markets on or around 16 July 2024 ("Admission") and will rank pari passu with the ordinary shares of the Company in issue. The Company's ordinary shares remain suspended from trading.

Total Voting Rights

Following Admission, the Company's issued share capital will comprise 181,715,665 ordinary shares of 0.01p each, with each share carrying the right to one vote, therefore the total number of voting rights in the Company will be 181,715,665. This figure may be used by shareholders as the denominator for calculations by which they will determine if they are required to notify their interest in the Company, or a change to their interest in the Company, under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

Jason Brewer, CEO of Marula Mining, commented:

"We are delighted to announce the acquisition of a majority interest in the historic Kruisrivier Cobalt Mine.

"This strategic move significantly enhances Marula's portfolio with the addition of a high-grade and brownfield cobalt project.

"Located in one of the world's premier mining jurisdictions and benefiting from excellent infrastructure, the Project presents a potential new development opportunity, particularly with the high-grade cobalt occurrences and other high value minerals that have been historically reported and identified through recent independent assay work. We now look forward to progressing the Project opportunity further.

"This acquisition provides our shareholders with further battery and strategic metals exposure, with cobalt crucial for the production of rechargeable batteries in electric vehicles, making it a critical mineral for the green energy transition.

"This acquisition further underscores our commitment to expanding our operational footprint in South Africa's battery metals sector, and I look forward to providing further updates on our progress onsite at Kruisrivier Cobalt."

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.

Review of Announcement by Qualified Person

This announcement has been reviewed by Mr Jacques Perold (PrSciNat, MGSSA, MIQ MSc(Eng), MSc(ESPM), NDSURMA, Datametrics), who is engaged by Marula Mining plc as its professional consulting geologist. 

Mr Jacques Perold is a professional geologist with 37 years of experience in the field and extensive knowledge of all aspects of mineral resource management.

 Mr Jacques Perold is Member of the Geological Society of South Africa (No. 965505) and a registered scientist of the South African Council for Natural Scientific Professions (Reg No. 400171/05) in terms of section 20(3) of the Natural Scientific Professions Act, 2002 (Act 27 of 2003) in the field of Geological Science (Professional Natural Scientist).

About Marula Mining

Marula Mining (AQSE: MARU A2X: MARU) is an African focused battery metals investment and exploration company and has interests in several high value mine projects in Africa; the Blesberg Lithium and Tantalum Mine in South Africa, the Larisoro Manganese Mine in Kenya, the Kinusi Copper Mine, the Nyorinyori Graphite Project, the NyoriGreen Graphite Project and the Bagamoyo Graphite Project all in Tanzania and the Nkombwa Hill Project in Zambia. As we advance operations at these battery metals focused projects, Marula will continue to build and expand its interests in other high-quality projects in Africa.

Marula's strategy is to identify and invest in advanced and high-value mining projects throughout East, Central and Southern Africa that the Directors believe would deliver returns for its shareholders. The Board and management team aims to establish Marula as a socially and environmentally responsible, sustainable, and profitable producer of critical metals and commodities that are of increasingly strategic importance to modern technologies and the global economy. Marula's shares are traded on the London AQUIS Stock Exchange (AQSE) and A2X Markets in South Africa.  Marula is exploring opportunities to admit its shares to trading on Kenya's Nairobi Securities Exchange and South Africa's Johannesburg Stock Exchange.

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Caution:

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.