en.Wedoany.com Reported - Following the arbitration ruling in favor of African Tantalum (Aftan), AIM-listed Kazera Global has reached a final settlement agreement with Hebei Xinjian Construction Co., Ltd. Aftan is Kazera's former tantalum and lithium mining operation in Namibia.

Under the settlement terms, Hebei Xinjian is required to make an initial cash payment of $500,000 to Kazera. This payment is expected to be remitted from Namibia, with both parties currently handling the necessary banking and foreign exchange control procedures to ensure the funds are in place. The settlement agreement will become effective upon payment of this initial amount.

The agreement stipulates that Kazera will receive a total of $10.5 million, with payments to be made in installments until December 2029. The agreement also provides Kazera with enhanced downside protection and an option for early settlement. As part of the settlement, Hebei Xinjian will withdraw its application for review of the original arbitration proceedings.

In retrospect, Kazera entered into a share sale and loan repayment agreement with Hebei Xinjian regarding Aftan in December 2022. Due to a material payment default by Hebei Xinjian, Kazera initiated arbitration proceedings in Namibia. On May 7, 2025, Kazera announced that the arbitration award was substantially in its favor, with the awarded amount approximately $11.9 million, plus ongoing interest and costs.

Kazera had previously received approximately $4.1 million from Hebei Xinjian. Combined with the $10.5 million settlement consideration, the total cash consideration stipulated under the transaction contract amounts to approximately $14.6 million. Kazera noted that this amount exceeds the originally agreed fixed cash consideration of approximately $13 million in the 2022 Aftan sale agreement.

The settlement agreement also includes an early settlement clause: if Hebei Xinjian pays the full amount before December 31, 2025, a discount of $9 million will apply. Kazera stated that this settlement provides a structured alternative path compared to the enforcement process of the arbitration award. Despite a favorable legal position, the enforcement process carries inherent uncertainties in terms of timing, cost, and practical execution.

Kazera's board currently plans to return approximately 80% of the net cash proceeds received from the settlement to shareholders, after comprehensively considering legal, tax, working capital, and regulatory factors. Once the initial $500,000 payment is received, it is expected to significantly alleviate the company's near-term external funding needs, enhance working capital flexibility, and allow management to focus on advancing production increases at its subsidiary Whale Head Minerals (WHM), the partnership with Rare Earth Minerals International (REMI), and work related to the 2A mining right.

In May, WHM signed a binding production sharing agreement with South African mineral processing group REMI, under which the two parties will share production on a 50:50 basis from the Walviskop heavy mineral sands project located in South Africa's Northern Cape Province.

Interim CEO Richard Jennings stated that the signing of this settlement agreement is a significant positive milestone for Kazera and its shareholders, providing a clear path for subsequent value recovery. He explained that while the company maintained high confidence in its legal position, the board was always committed to achieving the best practical commercial outcome for shareholders. After weighing the uncertainties, timing, and costs of alternative enforcement paths, this agreement offers greater certainty, meaningful downside protection, and an attractive commercial result.

Jennings noted that this settlement aligns with the board's broader strategic intent to transform Kazera into a disciplined investment company focused on value creation, monetization, and capital discipline. He emphasized that the settlement agreement, the REMI processing agreement, and the push to secure the critical 2A mining right further demonstrate that the new board is moving forward rapidly, drawing a line under historical issues and the failures of previous management, and focusing on accelerating the monetization of the company's valuable assets. He stated that the company's immediate focus is on completing and releasing the Competent Person's Report for the 2A project in the short term.

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