Marula Mining Plc - Quarterly Activities Update

Marula Mining Plc - Quarterly Activities Update

PR Newswire

London, April 28

Marula Mining PLC

("Marula'' or the "Company")

28 April 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 activities of the Company for the three-month period ending 31 March 2023 (the "Quarter").

KEY HIGHLIGHTS OF THE QUARTER

• Investment and Co-Development Partnership with Q Global Commodities Group

In January 2023, the Company signed a conditional Subscription Agreement, Co-Development Agreement, and a Relationship Agreement ("Investments Agreements") with Q Global Commodities Group ("Q Global"), one of South Africa's leading independent commodity, mining, logistics and investment funds.

As announced on 31 January 2023 under the Investment Agreements, Q Global will subscribe for up to £3.75 million under the Subscription Agreement through the issue of up to 100,000,000 new ordinary shares of 0.01 pence each in the Company at a price of 3.75 pence per new Ordinary Share through a staged equity investment across five equal tranches of £0.75 million. Africa. The Relationship Agreement also sets out the terms of the relationship between Q Global, the Company and its AQSE Corporate Adviser.

In accordance with these agreements, Mr Quinton van der Burgh, Q Global's CEO and one of South Africa's leading mining entrepreneurs, will be appointed Chairman of the Board of Directors, subject to various matters including completion of all normal regulatory approvals, due diligence and the proposed admission to trading of Marula's shares to the AIM market.

The Investment Agreements are conditional upon, amongst other things, a Rule 9 Waiver being obtained in accordance with the City Code on Takeovers and Mergers and shareholder approval at a forthcoming general meeting ("General Meeting") of the Company.

As at the date of this announcement, both the Company and Q Global are still progressing the various submissions to regulatory bodies in the United Kingdom and in South Africa with their respective advisors to obtain the necessary outstanding approvals.

• Processing Operations at the Blesberg Lithium and Tantalum Mine

Mining and Processing of the Existing Stockpiles.

Mining and processing activities at the Blesberg Lithium and Tantalum Mine during the Quarter were focused on the existing stockpiles of material from which high-grade spodumene is being recovered.

Processing, sampling and rehabilitation of the existing stockpiles continued in the Quarter, with all mobile mining equipment on site and operational and mine layout optimisation work continuing throughout the period. Upgrades were completed on haul roads and access ramps to the stockpiles and all key site infrastructure was established.

In total 6,500 tonnes of material were processed from the existing stockpiles during the Quarter and is contained in the new run-of-mine stockpiles pending final sorting and sizing and / packaged in one tonne bags pending delivery under the existing US$5 million Lithium Prepayment Facility announced in October 2022. This material comprised:

Tonnes	Sizing
630	>140mm
2,700	10mm to 55mm
3,200	<10mm

Assay Results of Spodumene Mineralisation

Assay results of the lithium bearing spodumene ore from the stockpiles taken during the Quarter have confirmed that the lithium grade of the material is highly linked to the colour of the spodumene mineralisation, with key results being:

Ore Colour Characteristic	Grade (Li2O)
Purple	7.86%
White	7.02%
Green	3.64%
Pink / Blue	2.15%

Major Sampling and Metallurgical Testwork Ongoing

Of the 6,500 tonnes of material that were processed during the Quarter, a total of approx. 13.1 tonnes of material was taken for testing and analyses in Johannesburg and Kimberley in South Africa and Mülheim-Kärlich in Germany:

Sizing	Kg	Testing
10mm to 240mm	9,000	Li2O grade analyses and carbonate testwork
<10mm	360	Li2O grade analyses and carbonate testwork
10mm to 55mm	2,000	Eros - process plant and recovery optimisation
10mm to 55mm	20	Eros - Li2O grade analyses
10mm to 30mm	1,000	Tomra - process plant and recovery optimisation
10mm to 30mm	500	Tomra - Li2O grade analyses
<10mm	200	Consulmet - DMS process plant optimisation

Assay results of two 4,000Kg samples indicated spodumene grades of 5.16% Li2O and 6.95% Li2O within the samples.

The variation in the high-grade lithium assays - a 34% variance - has resulted in the Company aiming to optimise the final sorting and bagging process of the material to ensure that the final grade and ore quality reconciliation is accurate and representative, and that it receives the optimal value for any future sales of any high-grade lithium in the spodumene product produced from the Blesberg Lithium and Tantalum Mine. This work is continuing in the current quarter.

Metallurgical and Processing Testwork to Produce High-Value Lithium Carbonate Product

9,360kg of material during the Quarter was despatched to SMP's pilot processing plant facilities in Johannesburg for metallurgical and processing testwork with the aim to confirm the economic viability of producing a high-value lithium carbonate product.

This work, which is focused on the processing of the spodumene from the Blesberg Lithium and Tantalum Mine into a lithium carbonate product, continued throughout the Quarter and is ongoing.

This work is focused on the establishment of a standalone processing plant with the initial capacity to process up to 2,400 tonnes per annum ("tpa") increasing to 12,000tpa of spodumene from the Blesberg Lithium and Tantalum Mine which will then be used as a primary feed to produce up to 1,200tpa of a high value lithium carbonate product.

Independent testing of the lithium carbonate product that has already been produced from these activities at SMP's pilot plant facilities during the Quarter as well as verification of the processing operation and financial benefits is currently being undertaken.

Testwork to Increase Spodumene Recoveries and Throughput

The 3,520kg of material that was despatched to Eros and Tomra in South Africa and Germany respectively during the Quarter was for optimisation of the existing processing of the stockpiles and with the aim to increase both the recovery levels and throughput volumes. This work is being done in parallel with the securing of new mobile mining equipment to achieve increased production rates and which was completed subsequent to the Quarter end, through Q Global and announced 6 April 2023.

Testwork for DMS Plant for Processing of Fines

The 200kg of material that was despatched to Consulmet during the Quarter was part of Southern Metal Processing Pty Limited's ("SMP") work in finalising the design of a static dense media processing facility which will include primary and secondary crushing, screening, classifying, sorting and extraction for the fines material contained in the existing stockpiles. This work is expected to be completed in the current quarter.

Deliveries under the US$5 Million Lithium Prepayment Facility

1,000t of spodumene is to be delivered under the first US$2.5 million tranche of the US$5 million Lithium Prepayment Facility.

As a result of the Company and SMP's management focus on the production of a higher value lithium carbonate product from the spodumene at the Blesberg Lithium and Tantalum Mine, deliveries have been delayed and will now commence at the beginning of May 2023 and are to be completed by July 2023.

Work is continuing in the current quarter on the assaying and sampling of the high-grade spodumene product to ensure that the final agreed grade of this product and the ore quality reconciliation is accurate and representative.

CORPORATE HIGHLIGHTS OF THE QUARTER:

• Intention to seek an AIM Listing of the Company's Shares

On 3 February 2023, the Company announced its intention to seek a listing of its ordinary shares on the AIM market of the London Stock Exchange subject to the preparation and acceptance of all the requisite documentation and regulatory approvals (the "Listing').

During the Quarter, the Company appointed all its key advisers to assist with the Listing.

• Cairn Financial Advisers LLP retained as the Nominated Adviser for the Listing
• Peterhouse Capital Limited appointed as the Company's sole corporate broker
• Mining capital markets law firm Memery Crystal, appointed as the Company's legal advisers and ENS Africa appointed as its African lawyers responsible for completing an independent legal due diligence report on the Company's projects
• Accounting firm Saffery Champness LLP appointed as Reporting Accountant
• The MSA Group appointed as the Company's technical consultant and responsible for preparing a Competent Persons Report on the Company's portfolio of battery metals projects in Africa

Work continued throughout the Quarter by the Company and its appointed advisors on the Listing.

• Appointment of PWC Kenya as Advisor on East African Transactions

PriceWaterhouseCoopers Limited Kenya ("PWC Kenya") was appointed in February 2023 as the Company's advisors in East Africa to provide transaction, legal and tax advisory services to support the Company's growth and mine development activities.

During the Quarter, meetings with PWC Kenya were focused on finalising transaction structures to complete a number of proposed mining investments and partnerships in Kenya, as well as optimising Marula's overall group corporate structure throughout the African continent.

• Increased 75% Interest Secured in the Kinusi Copper Project

On 20 February 2023, the Company announced that it had amended the terms of its agreement with Tanzanian mining company, Takela Mining Tanzania Limited ("Takela") in February 2023 and increased its interest in the Kinusi Copper Project from a 49% minority interest to a majority 75% interest.

A revised share and cash-based payment schedule was agreed with Takela, and an initial share-based payment at a 46% premium to the then share price was made in February 2023.

Further share-based payments, will be made to Takela, based on the 30-day volume weighted average price per share at the time of issue and subject to the achievement of key technical milestones including completion of the initial exploration program, of resource definition drilling and release of a JORC Compliant Resource statement and on a decision to mine being reached by the Company.

The decision to increase the Company's commercial interest in the Kinusi Copper Project followed several site visits by the Company's Board, which confirmed the high-grade copper mineralisation and potential that the Directors believe exists there, particularly with the identification of 30 additional surface exposures of copper mineralisation across the project area in the previous quarter.

• Investment in New High-Grade Nyorinyori Graphite Project

Marula entered into a binding heads of agreement with Takela in February 2023 for a 75% commercial interest in 10 granted graphite licences that make up the Nyorinyori Graphite Project located in the Simanjiro District, in the Manyara Region of Tanzania.

The 75% commercial interest in the Nyorinyori Graphite Project was secured for total consideration of up to £400,000 through staged equity payments and subject to certain technical milestones being achieved. The initial share-based payment was made to Takela in February 2023.

The signing of the heads of agreement with Takela has further strengthened the Company's position in Tanzania's fast growing graphite sector.

• Exercise of Warrants and Issue of Equity

As a result of the strong share price performance during the Quarter, with the Company's shares trading from an intraday low of 4.15 pence on 5 January 2023 to an intraday high of 12.90 pence on 31 March 2023, a number of warrants were exercised during the Quarter.

A total of 3,807,500 warrants were exercised in the Quarter which raised £152,300 of gross proceeds through the issue of 3,807,500 new ordinary shares.

Since the end of the Quarter, and as at the date of this announcement, a further 4,395,000 warrants were exercised which raised a further £175,800 of gross proceeds through the issue of 4,395,000 new ordinary shares.

As at the date of this announcement, the Company's issued share capital comprises 126,434,748 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 126,434,748.

As at the date of this announcement, the Company has the following warrants outstanding:

No. of Warrants Strike Price Expiry Date

4,892,5004 pence20 July 2023

6,103,9004 pence31 December 2023

700,000 10 pence31 December 2023

4,375,000 4 pence30 June 2025

13,562,500 4 pence31 December 2025

137,5002 pence20 July 2026

13,250,000 4 pence31 December 2026

• New Subsidiary Companies

The Company announced the establishment of Muchai Mining (Pvt) Limited ("Muchai Mining") in March 2023, as an 80% owned Zimbabwean operating subsidiary. Muchai Mining was established to focus on securing near-term and advanced lithium and copper mining and development opportunities in Zimbabwe's fast growing and highly attractive battery metals sector.

In addition to the subsidiary company in Zimbabwe, further subsidiary companies are proposed to be established in Tanzania and Kenya as the Company expands its activities in these countries.

• Increase in Director Holdings

On 3 March 2023, the Company's Chief Executive Officer, Jason Brewer, increased his shareholding in the Company with the acquisition of 3,478,750 ordinary shares on at a price of 8.5p per ordinary share for total consideration of £295,693.75. The acquisition was completed through Gathoni Muchai Investments Limited ("GMI"). Mr Brewer is a connected person to the Chief Executive Officer of GMI and a substantial shareholder and director of GMI.

Following the share purchase, GMI holds 10,798,750 ordinary shares, and Mr Brewer has an aggregate shareholding of 11,613,750 ordinary shares, with 815,000 held through Mayflower Capital Investments.

OPERATIONS HIGHLIGHTS OF THE QUARTER:

• Exploration Commenced at the Bagamoyo Graphite Project

On 11 January 2023, the Company's geological consultants, Geofields Tanzania Limited ("Geofields") commenced the initial Phase 1 Program exploration activities at the Bagamoyo Graphite Project.

The Phase 1 works included mapping, sampling, and trenching across the 22 granted mining licenses that make up the project area and which was specifically targeting high-grade, jumbo, and large flake graphite mineralisation. As part of this Phase 1 work Geofields were required to produce a comprehensive geological database and put forward recommendations for the next planned Phase 2 program which was to include drilling and additional trenching and sampling work.

The results of the Phase 1 work were released subsequent to the end of the Quarter.

• Appointment of Consultants to Commence Exploration at Kinusi Copper Mine

On 20 January 2023, the Company appointed Geofields to also commence copper exploration work at the Kinusi Copper Project.

The initial exploration work to be completed by Geofields was to be focused initially on the small-scale shallow copper mining activities which have already demonstrated potentially widespread high grade copper mineralisation and where over 30 surface exposures of copper mineralisation was identified from previous work completed by the Company's technical representatives and consultants and Takela in the previous quarter.

Mapping, sampling, trenching and establishment of a comprehensive geological database across the 10 granted mining licenses at the Kinusi Copper Mine are to be completed in due course. Samples from the planned exploration work to be sent for analyses in Tanzania and South Africa and the results are to be released in due course.

POST QUARTER OPERATING AND CORPORATE HIGHLIGHTS

• Kinusi Copper Mine Process Plant Design and Offtake Discussions

On 4 April 2023, the Company reported on its plans to install a copper processing plant at the Kinusi Copper Mine. Initial design and capital and operating costs work are underway and in line with the Company's strategy to advance the Kinusi Copper Mine to production.

As part of this planned production, Takela is to commence initial small-scale mining focusing on the Takela 1, 2, 3, 4 and 12 pits, with all the mined material to be stockpiled ahead of commissioning of the proposed copper processing plant. This initial mining and site upgrade work will run alongside the ongoing exploration work to be undertaken by the Company's on site geological team and geological consultants Geofields. This will include the preparation of initial drilling and establishment of drill pads for an initial diamond drilling program, comprising holes to depths of 100 to 150 metres to allow a better understanding of the structural controls to the already identified high-grade copper mineralisation and to also determine the depth extensions of this mineralisation.

SMP have also advanced the detailed design work necessary for completing the installation and commissioning of a copper processing plant, with various meetings during and post the Quarter in South Africa in regards to the final plant design and construction work. Site works are now to commence and will initially focus on the establishment of mine offices, and associated mine and operations support infrastructure.

In parallel with the commencement of site and process plant design works, negotiations have progressed for an initial copper offtake agreement for the sale and purchase of all copper and precious metals product produced from the Kinusi Copper Mine. As part of this process approximately 100 kilograms of representative samples from the Kinusi Copper Mine are currently in the process of being delivered for analysis, and finalisation of offtake and payment terms. Further samples are also being sent for assay testing and analysis as part of optimisation metallurgical and process plant test work.

• New Mobile Mining Equipment to Arrive at the Blesberg Lithium Mine to Double Production

On 6 April 2023, the Company announced that it had secured new mobile mining equipment for the Blesberg Lithium Mine for ZAR20 million (approximately US$1.2M) through Q Global's existing relationship with one of its principal equipment suppliers, Bell Equipment Limited.

The new mining equipment which includes a Kobelco SK380XDLC excavator, a JCB 3CX backhoe loader, two new JCB 456ZX wheel loaders, and two new Bell B25E articulated dump trucks are scheduled to start to arrive on site later in May 2023 and will replace the current equipment which has been leased from other suppliers. Further mobile mining equipment to support the Company's increased mining and exploration activities on site are expected to be secured in due course.

The arrival of this new equipment in Q2 2023 has provided the Company with the opportunity to more than double the capacity to mine and accelerate the reprocessing and relocation of the stockpiled material. This will allow the Company to implement its plans to increase monthly spodumene saleable production to 1,500t at full production levels and which is to be used for both direct sales and for processing to produce a higher value lithium carbonate product.

The arrival of this new equipment at the Blesberg Lithium and Tantalum Mine also allows the Company to commence activities on the underlying hard rock resources in the identified pegmatites and which will include preparation and planning of an initial resource drilling program that will form part of the Company's plans to establish a hard rock open cast lithium mining operation.

• Two Major Graphite Prospects Observed at the Bagamoyo Graphite Project in Tanzania

On 5 April 2023, the Company announced the preliminary results from the Phase 1 exploration activities at the Bagamoyo Graphite Project.

The work completed by Geofields included sampling, mapping and trenching across 18 of the 22 granted mining licenses, with samples collected and sent for analyses at SGS Laboratories in Tanzania.

The preliminary results confirmed that two graphite trends at the Mihuga and Saadan South Graphite Prospects within the Bagamoyo Graphite Project area, extend for over two kilometres and there are several outcrops of graphitic schist and graphitic gneiss that occur with large graphite flake sizes visibly observed and which are being quantified by accredited laboratory testing in Tanzania.

At the Mihuga Graphite Prospect surface mapping has identified an E-W trending mineralised envelop which extends up to approx. 500 metres in strike length on surface and is interpreted to extend a further two kilometres over six of the granted mining licenses. High-grade graphitic schist within the Mihuga Graphite Prospect was estimated to have graphite grades of between 35% to 75% based on visible observations.

At the Saadan South Prospect, which is located immediately south of an active graphite mining operation in an area considered by Geofields to be "a new and emerging graphite exploration environment capable of hosting significant primary graphite mineralisation", graphite outcrops were identified to have a NNE trending graphite zone of approx. 150m by 50m wide exposed from trenching and interpreted to extend for a further 750m across four of the granted mining licenses. High-grade graphitic schist was seen within the Saadan South Graphite Prospect and estimated across three to five metre widths to have graphite grades of between 35% to 65% based on visible observations.

Samples from both the Mihuga and Saadan South Graphite Prospects were collected for graphite and graphite-carbon analyses that is now to be undertaken at an accredited laboratory for confirmatory grade and flake size work.

• High-Grade Graphite Mineralisation Observed at Nyorinyori Graphite Project

On 4 April 2023, the Company announced that high-grade graphite mineralisation had been observed at the Nyorinyori Graphite Project, with visual estimates of +90% graphite content and identified jumbo graphite flakes throughout in shallow and broad graphite veins exposed at depths of approximately 2m from limited and small-scale mining activities.

In addition to this high-grade graphite mineralisation, additional associated graphite mineralisation was observed across the mining license area at surface from numerous outcrops, extending over an initial strike length of over two kilometres and which remained open.

Samples were taken and further bulk samples are to be taken for analysis and assay to determine total graphite content ("TGC") grade and flake size with results expected due later this quarter.

Based on the site visit and observations by senior management, the Company has now committed to an accelerated exploration program which will include further mapping, sampling and a maiden shallow drilling program.

In addition, the Company confirmed that negotiations have also commenced with Takela to potentially increase the scope of the project to include up to 25 additional granted mining licenses.

• Formal Commercial Agreements Signed for Tanzanian Copper and Graphite Projects

In April 2023, the Company confirmed that it had entered into Commercial Agreements with Takela on both the Kinusi Copper Mine and the Nyorinyori Graphite Project, and with Kusini Gateway Industrial Park Limited ("KGIP") on the Bagamoyo Graphite Project.

These Commercial Agreements replace the binding heads of agreements with Takela that were announced on 4 October 2022 and 20 February 2023 in respect of the 75% commercial interest in Kinusi and on 17 February 2023 in respect of the 75% commercial interest in Nyorinyori and the binding heads of agreement with KGIP announced on 30 November 2022 in respect of the 73% interest in Bagamoyo.

• Conversion of Convertible Loan Note and Discharge of Debenture

On 6 April 2023, Brahma Finance (BVI) Limited ("Brahma") converted the entire principal amount of a £265,000 of convertible loan notes ("CLN") into new ordinary shares in the Company that was secured in November 2022. 13,250,000 new ordinary shares in the Company were issued to Brahma.

As a result of the conversion of the CLN, the debenture held by Brahma over Marula's assets was discharged, and the Company was able to confirm that it was debt free.

Jason Brewer, Marula Mining PLC CEO said:

"It has been another fast paced quarter for the Company and its shareholders, with activities across all its projects.

"Marula has moved forward with its operations and it is pleasing to see this work being rewarded with steady growth in the share price performance as well as an increase in investor interest.

"During the Quarter, the Company has made progress in strengthening its focus on battery metal acquisitions, an important aspect to our strategy as we look to play our role in the global green transition. We are excited to have acquired a majority commercial interest in the Nyorinyori Graphite Project in Tanzania, and increased our holding in the Kinusi Copper Mine, and further expanded our reach to Zimbabwe with the newly established Muchai Mining subsidiary.

"Of significance to the Company is the partnership with Q Global Commodities that we announced during the Quarter. It is our belief that the Investment Agreements entered into are transformational for the Company. With the support of Q Global Commodities, Marula is better placed to deliver on its strategy of advancing its portfolio of battery metal projects through to production.

"Blesberg is currently the Company's only producing mine and it is pleasing to see that assays have continued to confirm the high-grade lithium in the spodumene. However, the focus is now for us is to develop this mine to produce a high value lithium carbonate product through our partnership with Southern Metals Processing. We will continue to look to produce and sell a high-grade spodumene product, but the economic benefits and financial returns to our shareholders and stakeholders of producing a much higher value lithium carbonate product is something which we are focused on as we transition the Blesberg Lithium and Tantalum Mine from its current stockpile reprocessing operations to a more conventional open pit large scale and long term mining operation.

"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."

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.

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 in Tanzania. As we advance operations in the projects, Marula is open to look into other high-quality commodities in several jurisdictions.

Marula aims at identifying and investing in advanced and high-value mining projects throughout East, Central and Southern Africa that can deliver rapidly for its shareholders and can be taken through to production and generate positive returns for all stakeholders. Our 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 quoted on the AQUIS Stock Exchange (AQSE) and is exploring opportunities to dual list on the London Stock Exchange's AIM Market and Kenya's Nairobi Securities Exchange.

For enquiries contact:

Marula Mining PLC Jason Brewer, Chief Executive Officer Faith Kinyanjui Mumbi Investor Relations	Email: [e-mail] Email: [e-mail]
AQSE Corporate Adviser Cairn Financial Advisers LLP, Liam Murray / Ludovico Lazzaretti	[phone]
Broker Peterhouse Capital Limited, Charles Goodfellow / Duncan Vasey	[phone]
Financial PR and IR BlytheRay Tim Blythe / Megan Ray	[phone]

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.