Marula Mining PLC - Half-year Report

1.            GENERAL INFORMATION

Marula Mining Plc (the "Company") is a company registered in England and Wales.  The condensed consolidated interim financial statements ("interim financial statements") of the Company for the six months ended 30 June 2024 comprise the results of the Company and its subsidiaries (together referred to as the "Group") and have been prepared in accordance with the Aquis Stock Exchange Growth Market Rules for Issuers. As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statement" in preparing these interim financial statements.

The interim financial information for the period 1 January 2024 to 30 June 2024 is unaudited. In the opinion of the Directors the interim financial statements for the period presents fairly the financial position, and results from operations and cash flows for the period in conformity with the generally accepted accounting principles consistently applied. The interim financial statements incorporate unaudited comparative figures for the interim period 1 January 2023 to 30 June 2023 and extracts from the audited financial statements for the year to 31 December 2023.

The financial information contained in this interim report does not constitute statutory accounts as defined by section 435 of the Companies Act 2006.

The comparatives for the full year ended 31 December 2023 are not the Company's full statutory accounts for that year. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those financial statements was unqualified but did include a reference to the uncertainties surrounding going concern, to which the auditors drew attention by way of emphasis of matter and did not contain a statement under s498 (2) - (3) of Companies Act 2006. The interim report has not been audited or reviewed by the Company's auditor. The key risks and uncertainties and critical accountancy estimates remain unchanged from 31 December 2023 and the accountancy policies adopted are consistent with those used in the preparation of its financial statements for the year ended 31 December 2023.

2.            TAXATION

No current taxation has been provided due to losses in the period.

3.            LOSS PER SHARE

The basic loss per share is derived by dividing the loss for the period attributable to ordinary shareholders by the weighted average number of shares in issue.

Diluted earnings per share amounts are calculated by dividing the net result attributable to ordinary equity holders after adjustments for instruments that dilute basic earnings per share by the weighted average of ordinary shares outstanding during the period (adjusted for the effects of dilutive instruments). For the periods ended 30 June 2024 and 30 June 2023, as the Group was loss making the effect of any share options is anti-dilutive such that the diluted EPS figure is equivalent to the basic EPS figure.

4.            EXPLORATION ASSET

Exploration and evaluation assets relate specifically to mining licenses and commercial interests held by Marula Mining PLC and its subsidiaries. The Group currently operates in 5 areas of interest via its subsidiaries or commercial interests. They are:

·      Blesberg Lithium and Tantalum Mine (South Africa);

·      Nkowomba hill Niobium and Tantalum project ( Zambia);

·      Bagamoyo Graphite Mine ( Tanzania);

·      Kinusi Copper Mine ( Tanzania);

·      Nyorinori Graphite Project ( Tanzania);

·      NyoriGreen Graphite Project ( Tanzania);

·      Larisoro Manganese project (Kenya)

The value of the Groups interest in exploration expenditure is dependent upon:

·       the continuance of the consolidated entity's rights to tenure of the areas of interest; 

·       the results of future exploration; and

·       the recoupment of costs through successful development and exploitation of the areas of interest, or alternatively, by their sale.

All costs relating to exploration have been capitalized.

Access rights to Nkombwa Hill

In the 2022 financial year, the Company secured a 23.75% interest in Xram Traws Limited and the Nkombwa Hill Project which lies within the boundaries of the licence. A Large Scale Exploration License, 27977-HQ-LEL, was awarded to Xram Traws Mining Limited on 28 December 2020 and is valid and enforceable for a period of 4 years from December 2021 and then renewed for a further 4 years and 2 years respectively.

In 2022 the Group did not commence any exploration activities on the Nkombwa Hill Project, given the acquisition of its interest in the project was only completed late in the year and the Group's focus was on the development of the Blesberg Lithium and Tantalum Project in South Africa.

In H1 2023, no exploration activities were able to be undertaken as a result of a dispute with the Ministry of Mines in respect to access and ownership of the 27977-HQ-LEL license.

This follows a series of favourable and uncontested appeal and rulings in Zambia by the Courts in H1 2023 which the Board of Directors believe will allow the Company to have full and unfettered access to the Nkombwa Hill Project.  As at 30 June 2024 the Group has not yet received a response from the Ministry of Mines

5.            TRADE AND OTHER RECEIVABLES

6.            TRADE AND OTHER PAYABLES

7.            POST REPORTING DATE EVENTS

On 9 January 2024 the Company announced it had received notification for the exercise of warrants over 375,000 new ordinary shares in the Company at an exercise price of 4 pence per share providing the Company with proceeds of £15,000.

On 10 January 2024 the Company announced it had received notification for the exercise of warrants over 50,000 new ordinary shares in the Company at an exercise price of 4 pence per share.

On 15 January 2024 it was announced that seven new Mining License Applications collectively made by Takela Mining Tanzania Limited and NyoriGreen Mining Limited at the Nyorinyori Graphite Project ("Nyorinyori") and the NyoriGreen Graphite Project located in Tanzania have been granted. Upfront consideration of US$25,000 per license is being made to TMT and NML, which has been satisfied through the issue, in aggregate, of 1,050,000 new ordinary shares in the Company at a price of 13.5 pence per new ordinary share ("Consideration Shares"). TMT have been issued 450,000 Consideration Shares for the 3 new mining licenses granted at Nyorinyori.  NML have been issued 600,000 Consideration Shares for the 4 new mining licenses granted at NyoriGreen.

On 23 January 2024 the Company announced it had received notification for the exercise of warrants over 162,500 new ordinary shares in the Company at an exercise price of 4 pence per share providing the Company with proceeds of £6,500.

On 29 January 2024 the Company announced it had received notification for the exercise of warrants over 50,000 new ordinary shares in the Company at an exercise price of 4 pence per share providing the Company with proceeds of £2,000.

On 8 February 2024 the Company announced it had entered into an addendum to the £3,750,000 conditional subscription agreement with K2020273872 (South Africa) Proprietary Limited (the "Subscription Agreement"). K2020273872 is a wholly owned subsidiary of Q Global.

On 1 March 2024 the Company has signed a binding terms sheet ("Term Sheet") with Kenyan manganese mine operator Gems and Industrial Minerals Limited ("GIM") for a commercial interest in the Larisoro Manganese Mine located in Samburu County in Northern Kenya. On signing  the Company has agreed to pay GIM and its nominees a sum of £200,000 to be satisfied in new ordinary shares or in cash. A further £300,000 will be payable to GIM on completion of the initial exploration program and a final payment of £750,000 will become payable on achieving 50,000 tonnes of commercial sales of manganese ore.

On 12 March 2024 NyoriGreen Mining Limited the Company's partner at the NyoriGreen Graphite Project ("in Tanzania, made eight new Mining License and one new Prospecting License applications for a total consideration of $25,000 USD per license.

On 19 March 2024 it was announced that the Group signed a long term offtake agreement for its Blesberg site.  The agreement is based on the sale and purchase of 100% of Blesberg's production of spodumene ore and concentrate to Fujax through to 31 December 2026, with a minimum of 50,000 tonnes ("t") at a grade of 6.00% lithium ("Li2O") (minimum 5.50% Li2O) to be delivered during this period and with an option to extend by a further three years thereafter.

On 21 March 2024 the Company announced it had received notification for the exercise of warrants over 125,000 new ordinary shares in the Company at an exercise price of 4 pence per share (the "Warrant Shares"), providing the Company with proceeds of £5,000.

On 12 April 2024 as announced on 17 February 2023, upon the completion of the initial exploration program, Marula is required to complete a share-based payment of £100,000 to TMT through the issue of 799,361 new ordinary shares at a price of 12.51p, which is based on the 30-day volume-weighted average price ("VWAP") of the Company. The Company will also complete a share-based payment of £250,000 to NML through the issue of 1,998,401 new ordinary shares at the VWAP of 12.51p, as announced on 28 September 2023. In aggregate 2,797,762 new ordinary shares have been issued at a price of 12.51p per share.

On 16 April 2024, the Company received notification for the exercise of warrants over 412,500 new ordinary shares in the Company at an exercise price of 4 pence per share, providing the Company with proceeds of £16,500.

On 23 April 2024 it was announced that the Company was granted 8 additional graphite licenses. Upfront consideration of US$25,000 per license is being made for these New Licenses, which, consistent with the commercial terms as announced on 15 January 2024, will be satisfied through the issue, in aggregate, of 1,050,000 new ordinary shares in the Company at a price of 13.5 pence per new ordinary shares.

On 24 April 2024 the Company announced it had received notification for the exercise of warrants over 300,000 new ordinary shares in the Company at an exercise price of 4 pence per share (the "Warrant Shares"), providing the Company with proceeds of £12,000.

On 10 June 2024 the Company announced it had received notification for the exercise of warrants over 500,000 new ordinary shares in the Company at an exercise price of 4 pence per share  providing the Company with proceeds of £20,000.

On 10 July 2024 the Company announced that its subsidiary, Muchai Mining South Africa, has signed a binding term sheet with Mansena Cobalt to acquire a 51% stake in Mansena Kruisrivier Cobalt. Under the agreement, Marula will issue £100,000 worth of shares and make a £100,000 cash payment upon completion of due diligence. Additionally, Marula will cover the full cost of an updated bankable feasibility study and pay a monthly management fee of ZAR100,000 to Mansena Cobalt. Within 12 months or upon a decision to mine, Marula will issue another £200,000 in shares and pay US$1.7 million in cash.

On 11 July 2024 it was announced that the Company had signed a binding term sheet  to acquire 80% stake in Agarwal Metals and Ores Limited, owner of Kilifi Manganese Processing Plant in Kenya. Initial consideration is  £100,000 cash and  £500,000 shares upfront  with a final cash payment of £2,000,000 and issue a further £500,000 worth of new ordinary shares at an issue price of 10 pence per share.

On 19 July 2024 it was announced that the Company has signed a formal Share Sale Agreement to acquire 100% of the shareholding in South African mining and exploration company Northern Cape Lithium and Tungsten (Pty) Limited. Under the commercial terms of the Agreement, the Company will now make a cash payment of approximately £125,000 (ZAR3,000,000) to the existing NCLT shareholders, and on or before 31 July 2024 and 30 September 2024 make two further payments each of £625,000 (ZAR15,000,000) payable at the Company's election in cash or through the issue of new ordinary shares in the Company.

On 1 August 2024 the Company's wholly owned subsidiary, Muchai Mining Kenya Limited ("MMK"), has entered into a Manganese Ore Supply Agreement ("Ore Agreement") with Kenyan incorporated, Kitmin Holdings Limited ("Kitmin"). The Ore Agreement is for an initial period from 1 August 2024 to 31 December 2026 and may be extended by a further three years thereafter. Kitmin will be responsible for the supply and delivery of a minimum 10,000 tonnes per month ("tpm") of manganese ore at a minimum grade of 20% manganese ("Mn"), to the Kilifi Manganese Processing Plant (the "Kilifi Plant").

On 2 August 2024  the Company announced it has acquired an Ore Sorter and will soon be transported to Springbok in the Northern Cape for maintenance and refurbishment before installation at Blesberg. The Company has also secured ZAR 7 million (£300,000) through the AUO Commercial Brokerage LLC Subscription Agreement to cover expenses related to the Ore Sorter, issuing 8,007,664 new shares at 3.75 pence each.

On 2 August 2024 the Group was awarded a Mining Permit for its Blesberg site, which is valid for a period of two years until 24 May 2026 and extends over five hectares, allows for development and open pit mining of lithium, tantalum and niobium ores and feldspar at Blesberg, and is in addition to the already approved stockpile re-processing operations.

On 5 August 2024 the Company announced the signing of a share sale and purchase agreement for the acquisition of an 80% stake in Agarwal Metals and Ores Limited (AMO), a Kenyan mineral processing company. AMO owns the Kilifi Manganese Processing Plant, located 60 kilometres from the Port of Mombasa in Kilifi County, Kenya. The plant, on 1.31 hectares of freehold land, is equipped with various processing equipment for manganese ore. The agreement replaces a previous terms sheet from July 2024, with Marula set to transfer a final cash payment of £2 million from AUO Commercial Brokerage LLC and the Company issued 5,000,000 new shares to AMO's major shareholder.

On 28 August 2024 it was announced that the Group had secured two manganese ore supply agreements for the Kilifi Manganese Processing Plant in Kenya. The first agreement involves receiving 30,000 tonnes of manganese ore with a minimum grade of 24% over six months, with the possibility of further deliveries. The second agreement provides for monthly deliveries of 5,000 tonnes of ore, also with a minimum 24% manganese content, for an initial period of one year, with the option to extend for an additional two years. Marula will handle mining, screening, and transportation of the ore.

There have been no further subsequent events.

Caution regarding forward looking statements

This announcement has been prepared for information purposes only.

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.