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Marula Mining Plc - Quarterly Activities Update

Marula Mining PLC

(“Marula’’ or the “Company”)

24 January 2023

Quarterly Activities Update

Marula Mining (AQSE: MARU) (“Marula” or the “Company”) an African focused mining and development company, is pleased to update the market and shareholders on the quarterly activities of the Company for the three-month period ending 31 December 2022 (the “Quarter”).

Operations Highlights for the Quarter:

  • US$5 Million Lithium Prepayment Facility Secured for Blesberg Lithium and Tantalum Mine

As announced on 27 October 2022, a US$5 million Lithium Prepayment Facility (“Prepayment Facility’) was signed with Southern Jade Resources Pty Limited, a subsidiary of global commodity group Traxys SARL, for the purchase of the first two shipments of high-grade 'run-of-mine" lithium ore produced from the Blesberg Lithium and Tantalum Mine located in the Northern Cape in South Africa (“Blesberg”).

As announced on 27 October 2022, the first US$2.5 million was advanced and received by the Company and its mining and processing contractors, Southern Metal Processing Pty Limited ("SMP").

US$1.7 million of the funds were used by the Company to increase its ownership in Blesberg, subject to receipt of all necessary regulatory approvals in the UK and South Africa and the US$0.8 million balance used by SMP to fully fund the first phase capital and working capital costs to bring the Blesberg project into the production of high-grade lithium ore from reprocessing of existing stockpiles at Blesberg.

  • Processing of High-Grade Lithium Stockpiles Commences at Blesberg

As announced on 25 November 2022, the Company’s mining and processing contractor, SMP, commenced stockpile processing operations at Blesberg.

The commencement of these activities followed mobilisation to the site of all mobile mining equipment and the majority of the required processing plant during October 2022 and completion of the initial stockpile processing plans and optimisation work and upgrades on mine and surface infrastructure.

The processing operations, which are ongoing, are focused on the existing stockpiles. Sampling and visible inspection of these stockpiles has identified high-grade 'run-of-mine" lithium ore which is crushed and screened through mobile processing equipment and deposited in new run-of-mine stockpiles before being sorted and bagged for delivery under the Prepayment Facility.

Production of the first 1,000 tonne of high-grade lithium ore is expected to occur early in 2023 with the first deliveries under the Prepayment Facility scheduled this month.

  • Investment in High-Grade Copper Mining Project in Tanzania

As announced on 4 October 2022, the Company entered into a binding heads of agreement with Takela Mining Tanzania Limited (“Takela”) to secure a 49% commercial interest in the Kinusi Copper Project (“Kinusi”) located in Mpwapwa District in the Dodoma Region of central Tanzania.

Kinusi comprises 10 granted primary mining licences which are valid for a period of seven years and where due diligence work undertaken by the Company’s management and consultants identified a potential high grade and shallow copper ore body that appears to extend for over one kilometre and remains open in all directions.

Samples of the copper ore mined from the small-scale activities on site and azurite and malachite copper mineralisation exposed in shallow pits and shafts reported copper grades of 7.28% copper, 19.12% copper and 31.32% copper using a hand-held XRF.

During the Quarter, Marula and Takela management representatives met with regional and local government officials and commenced initial exploration and survey work, which identified 30 additional surface exposures of copper mineralisation across the project area.

The investment in Kinusi is considered to be in line with the Company’s battery metals focus and strategy in identifying opportunities which are considered high-grade, and with the potential to be near-term production and cashflow generating projects.

  • Interest Secured in Graphite Mining Licenses in Tanzania

As announced on 30 November 2022, the Company entered into a binding heads of agreement with Tanzanian mining company, Kusini Gateaway Industrial Park Limited (“KGIP”) under which it has secured a 73% commercial interest in the Bagamoyo Graphite Project (“Bagamoyo”).

Bagamoyo comprises 22 granted graphite mining licenses that are valid for a period of approx. seven years through to August 2029 and are located in the Bagamoyo District in the Pwanai Region of Tanzania.

The granted mining licenses extend over an area of approx. 180 hectares and are close to existing graphite mining and exploration activities. The Company’s planned exploration activities will target high-grade, jumbo and large flake graphite mineralisation.

The transaction with KGIP further strengthened the Company’s position in the battery metals sector and has provided the Company with the opportunity to secure a major strategic position in Tanzania’s growing graphite exploration and mining sector.

Post Quarter Operations Highlights:

  • Graphite Exploration Activities Commence at the Bagamoyo Project

Post the Quarter end, in January 2023, the Company announced on 20 January 2023 that the initial Phase 1 Program exploration activities had commenced at the Bagamoyo Project in accordance with the Heads of Agreement signed with KGIP and announced 30 November 2022.

Geofi­elds Tanzania Limited (“Geofields”) has been engaged to complete this Phase 1 Program work which is to include mapping, sampling and trenching across the 22 granted mining licenses and targeting high-grade, jumbo and large flake graphite mineralisation. The Phase 1 Program work is scheduled to be completed in Q1 2023.

  • Consultants to Commence Copper Exploration at the Kinusi Project

Post the Quarter end, the Company announced on 20 January 2023 that it had engaged Geofields to commence copper exploration work at the Kinusi Project.

The planned exploration work, which is to commence in February 2023, will focus initially on the small-scale shallow copper mining activities which have demonstrated potentially widespread high grade copper mineralisation across the 10 granted copper mining licenses.

The work will also focus on over 30 additional surface exposures of copper mineralisation that were identified from previous work completed by the Company’s technical representatives and consultants and Takela in November 2022. Work to be undertaken by Geofields at Kinusi will include mapping, sampling, trenching and establishment of a comprehensive geological database that is expected to enable the Company to advance project development.

Corporate Highlights for the Quarter:

  • Successful AGM Held and Resolution Approved to Expand and Strengthen Investment Strategy

All resolutions at the Company’s Annual General Meeting held on 18 November 2022 were approved.

One of the resolutions which was passed was to vary the investing strategy of the Company to allow Marula the authority to acquire majority interests of the entire issued and to be issued share capital in identified investments, projects, and entities.

The passing of this resolution has allowed the Company to explore a wider range of opportunities with the aim of delivering increased returns for its shareholders, in line with the Company's strategy of focusing on advanced or producing projects in Africa and the battery metals sector.

Since the passing of this resolution, the Company has secured a majority interest in the Bagamoyo Graphite Project and also the Blesberg Lithium and Tantalum Mine, subject to receipt of regulatory approvals in South Africa, which as of the end of the Quarter (being 31 December 2022) remained outstanding.

  • Equity Placing and Convertible Loan Notes

As announced on 27 October 2022 and 18 November 2022, the Company raised £519,500 of gross proceeds through the issue of 25,975,000 new ordinary shares at a price of 2 pence per new ordinary share (“Equity Placing”). Warrants were also issued, with one warrant for every two shares subscribed for, at an exercise price of 4 pence for a period of exercisable until 31 December 2025.

The Company also issued £265,000 of secured Convertible Loan Notes ("CLN") to Brahma Finance (BVI) Limited ("Brahma") repayable 2 years from the date of issue. Brahma will be able to convert part or all of the CLN in minimum increments of £10,000, with the conversion price being fixed at 2 pence per new ordinary share.

Net proceeds from the Equity Placing and CLN will be used for general working capital purposes and to fund its investment strategy, new investment acquisitions and ongoing exploration and development activities at the Company’s projects.

  • Major Fund Investment

The Company announced on 27 October 2022 that it is in advanced discussions with two African-focused mining investment funds on potential transactions that would involve a significant investment in the Company.

These discussions, whilst still ongoing at the end of the Quarter, are considered to potentially be transformative to the Company and allow the Board and management to increase its growth and development plans in the battery metals sector. The Company expects to make further announcements on this in due course.

  • Board and Management Changes

During the Quarter, Mr Richard Lloyd elected not to seek his re-appointment as a director of the Company at the Annual General Meeting, as a result of ongoing negotiations with the Company regarding his role in a strengthened and expanded non-board role for the Company.

The Company is currently looking to strengthen its executive management team to support the Company’s growth strategy and expansion in the battery metals sector. The Company will make further announcements on this in due course.

Post Quarter Corporate Highlights:

  • Exercise of Warrants, Issue of Equity and Warrants, Warrant Extension and RPT

On 20 January 2023, the Company announced (i) the exercise of warrants raising gross proceeds of £80,000 for the Company; (ii) the issue of new ordinary shares and warrants over new ordinary shares in lieu of financial advisory services provided to the Company; (iii) receipt of funds and the issue of new ordinary shares and warrants by way of a delayed subscription to the Company’s previous fundraisings announced 27 October 2022 and (iv) the extension to the expiration term of certain warrants.

Jason Brewer, Marula Mining PLC CEO said:

“Over the period, I am proud of our accomplishments, as we continue on an upward trajectory towards our near-term project development and production milestones across our projects.

“The Company has made progress in strengthening its focus on battery metals acquisitions, something that’s important to our strategy, as we look to play our role in the global green transition. We are excited to add new projects such as the Kinusi Copper Project and Bagamoyo Graphite Project, to our portfolio of assets, and in Tanzania, a top tier mining jurisdiction.

“Great progress in particular was made at the Blesberg Lithium and Tantalum Mine during the Quarter, where we made significant strides towards becoming a producer in the short-term and providing real further value for both our shareholders and the local communities. I am pleased with this progress which has not gone unnoticed by many commodities trading groups and investors who are looking to secure long-term and sustainable supplies of lithium to meet record levels of demand.

“The funding we secured to increase our interest in Blesberg and to fund its development was a major win for our shareholders, not only was it structured against future high-grade lithium ore production and thus reducing dilution to shareholders interests, but I believe it was a great endorsement of the project and management and our plans to develop it in the long-term.

“I would like to thank all of our shareholders and the Marula team for the continued support, and I look forward to updating the market with ongoing activities as and when appropriate.”

About Marula Mining

Marula Mining (AQSE: MARU) is an African focused battery metals investment and exploration company and has interests in several high value mine projects in Africa; Blesberg Lithium and Tantalum Mine in South Africa, Nkombwa Hill Project in Zambia and Kinusi Copper mine and Bagamoyo Graphite Project in Tanzania. 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 AQUIS Stock Exchange (AQSE), Marula is exploring opportunities to admit its shares to trading on AIM, the market operated by the London Stock Exchange’s plc, and Kenya’s Nairobi Securities Exchange.

For enquiries contact:

Marula Mining PLC
Jason Brewer,
Chief Executive Officer

Faith Kinyanjui Mumbi
Investor Relations



Email : jason@marulamining.com

Email : info@marulamining.com

AQSE Corporate Adviser
Cairn Financial Advisers LLP,
Liam Murray / Ludovico Lazzaretti

+44 (0)20 7213 0880

Broker
OvalX,
Tom Curran / Thomas Smith

+44 (0) 20 7392 1568

Financial PR and IR
BlytheRay
Tim Blythe / Megan Ray

+44 (0)20 7138 3204

Caution;

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identi?ed 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 re?ect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.