Shuka Minerals Plc has agreed to the assignment of approximately £800,000 of its convertible loan from Gathoni Muchai Investments Ltd to four South African strategic investors, strengthening the company’s regional investor base as it advances its mining interests in Zambia.
The investors will acquire the assigned portion under the existing loan terms and intend to convert it into up to 20 million new Shuka shares at 4 pence each. Shuka said the conversion price represents a premium to its recent London market price.
Following the assignment, the Gathoni loan is expected to decline from approximately £1.36 million to £560,000. This follows a separate reduction of about £227,618 in July.
Shuka will also grant the investors warrants to subscribe for up to a further 20 million shares at 8 pence each, exercisable until 20 July 2029. If exercised, the warrants could provide additional funding but would also increase the company’s issued share capital and dilute existing shareholders.
The transaction comes as Shuka develops its Kabwe mining project in Zambia, a historically significant zinc and lead operation. The company has been undertaking exploration to reassess mineralisation and establish the project’s future development potential.
Recent drilling has produced high-grade zinc results, although exploration findings do not yet establish commercial viability. Further technical, environmental, financial and regulatory work will be required before any potential redevelopment can be assessed fully.
The involvement of South African investors also highlights the growing role of regional African capital in supporting mining projects across the continent. For Shuka, the transaction reduces its outstanding Gathoni debt while introducing new investors with potential long-term exposure to the Kabwe project.
The ultimate impact on shareholders will depend on the completion of the proposed conversion, any subsequent exercise of warrants and Shuka’s ability to progress Kabwe towards commercially viable production.
