By: Mining review Africa

It has given notice of issuance of consideration due to former Kula shareholders whose shares were compulsorily acquired by Forrestania with the consideration being held by Kula on trust for those former Kula shareholders.

The takeover primarily focuses on Western Australian gold consolidation, and naturally creates significant uncertainty for Kula’s emerging African operations, particularly in Malawi.

Prior to the takeover, Kula held a 75% stake in the Wozi niobium project in Malawi. The project’s maiden drilling programme was successfully completed late last year, just as the takeover reached a critical stage.

However the completion of the takeover has naturally created a shift in the project’s trajectory. While Kula had originally intended to spin off the Wozi project to give shareholders direct exposure to the niobium market, this plan was conditioned on the results of the maiden drilling.

Because Forrestania’s strategy is heavily weighted towards Western Australian gold assets, the future development or potential divestment of the Wozi project now rests with the new Forrestania-led board.

Its stated strategy is to become a Western Australian gold producer by 2026. This suggests non-core, non-gold African assets like the Wozi project may be divested, joint-ventured, or deprioritised to focus capital on Australian gold projects. 

The merged entity is marketing itself as a focused gold-growth company, hence a rationalisation of non-core assets could be expected as the company seeks to reduce the funding and execution risk associated with Kula’s diverse portfolio.

So available funds are likely to be redirected toward the Mt Palmer and Southern Cross gold projects in Australia rather than high-risk exploration ventures in Africa.