Elandsfontein update and further bridge loan

RNS Number : 8800S

Kropz PLC

14 March 2023

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

14 March 2023

Kropz Plc

("Kropz" or the "Company")

Elandsfontein phosphate project sales update and further bridge loan facilities

Kropz Plc (AIM: KRPZ), an emerging African phosphate producer and developer, is pleased to announce a further sale of 20,000 tonnes of phosphate concentrate from Kropz Elandsfontein (Pty) Ltd ( " Elandsfontein "). As with the first bulk sale recorded in January 2023, concentrate production is still not yet at optimal quality, thus it is still being sold at a discount to current market prices.  Plant modifications and adjustments to processing parameters have resulted in significant improvements in daily throughput and quality but further optimisation is required.  A shortage of fatty acid, a flotation reagent, is also being experienced due to unexpected shipping delays from the USA which is resulting in lower mass recovery in the direct flotation circuits. A locally sourced alternative product is being trialled while various shipping options have been implemented with the USA supplier. This delay in Kropz' ability to consistently achieve bulk sale revenues at market price has resulted in an immediate funding requirement of ZAR 25 million (approximately US$ 1.4 million) for Elandsfontein.

Consequently, Kropz, Elandsfontein and ARC Fund ("ARC") have agreed to ZAR 285 million (approximately US$ 15.5 million) bridge loan facilities (the "Loan") to meet the immediate and additional near term funding requirements at Elandsfontein as it progresses commercial sales. Kropz will draw down ZAR 25 million (approximately US$ 1.4 million) of the Loan on 14 March 2023.

The Loan is unsecured, repayable on demand, and there are no fixed repayment terms. It is repayable by Elandsfontein on no less than two business days' notice. Interest is payable on the Loan at the South African prime overdraft interest rate plus 6%, nominal per annum and compounded monthly.

The Loan is a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. Gerrit Duminy, a director of the Company, is the representative of ARC. Mike Nunn, a director of the Company, is the beneficial owner of Kropz International SARL ("Kropz International"). ARC and Kropz International are treated as acting in concert for the purposes of the City Code on Takeovers and Mergers. Accordingly, neither has been involved in the approval of the Loan by the Company's board. The directors of the Company, who are considered independent for the purposes of the Loan, having consulted with the Company's nominated adviser, consider the terms of the Loan to be fair and reasonable insofar as the Company's shareholders are concerned.

The Company will provide further updates in due course.

For further information visit   www.kropz.com  or contact:

Kropz Plc	Via Tavistock
Louis Loubser (CEO)	[phone]
Grant Thornton UK LLP	Nominated Adviser
Samantha Harrison Harrison Clarke George Grainger Ciara Donnelly	[phone]
Hannam & Partners	Broker
Andrew Chubb Ernest Bell	[phone]
Tavistock	Financial PR & IR (UK)
Nick Elwes Jos Simson Emily Moss	[phone] [e-mail]
R&A Strategic Communications	PR (South Africa)
Charmane Russell Marion Brower	[phone] [e-mail]  [e-mail]

About Kropz Plc

Kropz is an emerging African phosphate producer and developer with projects in South Africa and in the Republic of Congo. The vision of the Group is to become a leading independent phosphate rock producer and to develop into an integrated, mine-to-market plant nutrient company focusing on sub-Saharan Africa.

-ENDS-

 

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