By: Creamer media

Following a delay in the release of funds needed to complete the planned acquisition, Gathoni Muchai Investments (GMI) says it will this week pay out funds pursuant to an increased loan agreement entered into with Shuka in June, which will satisfy the $1.35-million cash consideration owing to LEM.

GMI is Shuka’s second-largest shareholder.

Shuka will therefore soon be able to complete the acquisition.

Shuka in December entered into a share purchase agreement with the shareholders of LEM to acquire the company and its Kabwe zinc mine, in central Zambia.

The bigger loan amount agreed with GMI – amounting to £2-million – will cover the balance of the cash consideration due to the LEM vendors at completion of the acquisition, while also providing funding for initial exploration work at the Kabwe mine and for general working capital requirements.

Since the start of the year, Shuka and its legal and corporate advisers have been working to satisfy the outstanding conditions to complete the Kabwe mine acquisition.

Technical site visits have been undertaken in Zambia and meetings in Lusaka and South Africa have also been held with key stakeholders, as well as the company’s existing and potential future financiers.

Shuka also agreed with the LEM vendors that the share consideration for the acquisition, being $3-million, will be settled through the issue of 28.6-million new ordinary Shuka shares and two-million warrants.

The company says it looks forward to accelerating the geological, mining and mineral processing planning for Kabwe, which is a world-renowned asset.