JOHANNESBURG (miningweekly.com) – The Johannesburg Stock Exchange’s (JSE's) newly listed Shuka Minerals states in its listing presentation that it is already experiencing the “fresh approach” of the government of Zambia to mining as its sets out to revive a base metals mine once run by Anglo American.

The Zambian zinc-and-lead Kabwe mine operated for 88 years before closure at a time of commodity price downturn and Shuka is now intent on “breathing new life” into the asset, which benefited from very few modern exploration techniques when in operation from 1904 to 1994.

“We still have to finish the process of purchasing the project on the 11th of June, which is coming quickly, and it's the matter of final Competition Commission clearance in Zambia and the funding, which is one reason why I'm here in Joburg. 

"We've been finalising that now, so we should be in good shape for the 11th, and then we're off to the races on the geology,” Shuka CEO Richard Lloyd told Mining Weekly at the JSE listing on Wednesday, May 21. (Also watch attached Creamer Media video.)

During its 88 years of operation, Kabwe produced 12-million tons of zinc and lead ore, but has never had a modern gravity or magnetic survey completed.

Orebodies 1 to 6 are previously mined deposits, with orebody 2 bearing untouched silicates. The remaining resources are untouched sulphides.

“We've got 16-million tons of ore running at 12% to 14% zinc and about 3% to 4% lead. That's four-million tons of contained metal, and you can do the sums. On the current zinc and lead prices, that's metal in the ground of about $6-billion. Now, obviously you've got to get it out, but with a ship with a market cap of $3-million,” Lloyd pointed out.

Orebody 2 is seen as the one with the most immediate and the highest potential. Its silicate resources averages 11% zinc and 1.7% lead, with silver, vanadium and gallium also existing, according to a 2023-dated Behre Dolbere report.

“We've identified a few of the funkier critical metals, such as gallium, which probably nobody had even heard of in 1904,” Lloyd noted.

A $145 200 capital expenditure (capex) is being lined up for Shuka’s other asset, Rukwa in Tanzania, from which coal is sold to local Tanzanian cement plants. The capex is designed for a phased restart and will be spent on excavators and loaders, wash-plant upgrades and repairs.

Mining Weekly: What do you think the JSE listing can do for Shuka?

Lloyd: The rationale and the thought process behind it was to come here early to allow the South African investors to take part at what I call our base. I only started as CEO four months ago and my strapline for next week’s Junior Indaba is breathing life back into Rukwa and Kabwe, which will be our two assets going forward. It’s to enable the South African investor to take part at an early stage . . . and get people to understand the company, believe in what we're going to do.

The name Shuka reminds one of East Africa and the red garments of the people.

Yes, Shuka is the traditional dress of the Maasai. My nonexecutive director, Edu Ruheni, is Maasai himself. He grew up on the border of Kenya and Tanzania. He’s critical to working with the communities. The Rukwa mine in Lake Tanganyika has been under care and maintenance for the last year. We need to bring that back to life, breathing life back into Rukwe and Kabwe, and the critical thing now is working with these communities.

Mining Weekly noticed that South Africa, and Southern Africa were also on your list of investment possibilities.

Yes, we're in discussions on a South African project that may link with the Zambian operations, and, yes, we'll look at these projects, we'll assess them. There's a lot on my plate at the moment with getting Rukwa up and running again, and obviously Kabwe, with the geology, the drilling, and then the dewatering and working out where the plant is going to go, so there's a lot on my plate. But if there's something that's going to link quite nicely, absolutely.

AFRICA FOCUSED

Shuka, which has been listed on the London AIM for a couple of decades, stated in its JSE pre-listing announcement that it is committed to exploring and harnessing Africa's mineral resources.

Last year Shuka announced an agreement with Gathoni Muchai Investments, its second largest shareholder, for an unsecured, interest-free and non-convertible loan of £500 000, of which £250 000 has been drawn down to date, with further drawdowns planned in the current quarter.

Going forward, it will explore the potential for offtake financing and has received early-stage non-binding interest from a Europe-based global commodity trading group that is currently purchasing zinc ores from the Kabwe area, regarding the potential for a long-term zinc and lead offtake agreement.

The initial advance under the loan from Gathoni Muchai Investments provides working capital in the near term.