Aim-listed Kazera Global's subsidiary Whale Head Minerals (WHM) has entered into a binding 50:50 production sharing agreement with South African mineral processing group Rare Earth Minerals International (REMI) in relation to the Walviskop heavy mineral sands (HMS) project in South Africa's Northern Cape province.

The PSA, which takes effect from June 1 and has an initial term of 12 months, is expected to materially enhance operational capability, accelerate production growth and significantly reduce the working capital burden associated with scaling operations at Walviskop.

In exchange for 50% of the HMS revenue generated from the project, REMI is deploying significant processing plant and associated infrastructure at Walviskop, with an estimated replacement value in excess of £1-million, with no upfront capital cost to Kazera, creating a fully aligned production partnership.

REMI will also make a monthly operational funding contribution of R600 000, or about £27 000, toward project costs, materially reducing Kazera's near-term working capital requirements and supporting accelerated production growth.

Kazera points out that the parties are targeting enhancements in the HMS concentrate grade at Walviskop, with work under way to improve product quality toward about a minimum 40% titanium dioxide, which the company believes will materially improve product saleability and realised pricing.

Further, production is expected to progressively ramp up to about 10 000 t a month of processed HMS by the third quarter. The longer-term production target is for 20 000 t a month of HMS concentrate.

"This agreement represents a potentially pivotal moment for Kazera and, in my view, materially changes the trajectory of our Walviskop project. Following an intensive period of technical work and preparation at site, we now have a fully aligned partner bringing significant processing capability, operational expertise and funding support to Walviskop.

"Importantly, REMI's economics are directly aligned with ours and driven by production success.

"Beyond materially reducing the working capital burden associated with scaling production, this partnership provides a clear pathway toward increasing both production volumes and concentrate quality over the coming weeks and months. We believe this has the potential to materially transform the economics of Walviskop and strengthen its position within the heavy mineral sands market," Kazera interim CEO Richard Jennings comments.

He adds that the company believes the project now has a strong platform from which to grow into a meaningful and profitable operation.

"Our attention also increasingly turns toward the anticipated award of the 2A mining right, which we expect to result in a further major step forward for the business.

"In parallel, we are well advanced in the completion of a competent persons' report (CPR) for the 2A area, which we believe will help illustrate the scale and longer-term potential of the 2A opportunity. We expect to be in a position to share the findings of the CPR in late June," Jennings says.

A spokesperson for REMI, meanwhile, says the group is "proud and enthused" to partner with Kazera Global at Walviskop.

"REMI's operational proficiency and HMS experience will complement Whale Head's existing site capability as we progress the shared objective of developing these valuable early-stage assets towards meaningful resource realisation.

"Our principals – Lewellyn Rampersad, Gershwyn Chetty, Dr Peter Fernando and Trevor Chetty – look forward to working alongside the WHM team as we advance the project over the coming months," the spokesperson comments.