Shuka Minerals raises $1 million in strategic deal with Zambian investor

Shuka Minerals Plc, a Kenyan-based dynamic and innovative mining and development company, has secured £750,000 ($1 million) in fresh capital through a strategic subscription agreement with Zambia-based Menel Energy and Resources Limited, marking a key step in strengthening its balance sheet and advancing its flagship Kabwe project.

The capital raise, priced at 4 pence per share, represents a premium of about 53.9% to the company’s previous closing price, signaling strong investor confidence despite prevailing market conditions. The deal will see Menel acquire 18.75 million new shares in two tranches, alongside warrants that could further increase its stake.

Strategic backing and board representation

Upon completion, Menel is expected to hold roughly 12.3% of Shuka Minerals’ enlarged share capital, positioning it as a significant shareholder. The Zambian investment firm will also gain the right to appoint a non-executive director, with its CEO, Tanda Syamunyangwa, likely to join the board pending standard approvals.

Menel, a privately held investment company focused on natural resources, has been expanding its footprint across Africa’s mining sector. In 2025, it invested approximately $6.94 million in GoviEx Uranium Inc., acquiring a 13.6% stake, alongside other mining investments in southern Africa.

Funding to support Kabwe operations

The proceeds from the subscription will be deployed in two equal tranches of £375,000 ($0.47 million) each. The first tranche will primarily be used to meet obligations under an amended loan agreement with Gathoni Muchai Investments Limited (GMI), with the remainder allocated to drilling activities at the Kabwe project and general working capital.

Located in Zambia, Kabwe, the London-listed African-focused mining company, is a historically significant mining site with more than 14.5 million tonnes of ore previously extracted. The project still holds an estimated 5.7 million tonnes of remaining resources, including approximately 700,000 tonnes of zinc, although these figures should be independently verified.

Loan restructuring extends repayment timeline

Alongside the capital raise, Shuka Minerals has restructured its existing debt with GMI, which currently stands at about £1.59 million ($2.13 million). The revised agreement extends the final repayment deadline to December 31, 2027, providing the company with greater financial flexibility.

As part of the revised terms, Shuka will make a $250,000 payment by July 31, 2026, reducing the principal by $300,000. The remaining balance will accrue interest at 8% per annum, with the option to settle interest payments in cash or shares.

GMI also retains the right to convert outstanding debt into equity at 4 pence per share, accompanied by warrants exercisable at 8 pence, adding a potential layer of future dilution.

CEO outlines growth outlook

Chief Executive Officer Richard Lloyd welcomed the strategic investment, highlighting its importance in advancing the company’s long-term ambitions.

“I am delighted to welcome Menel Energy and Resources as a strategic investor and significant shareholder. They bring extensive in-country experience and relationships, as well as significant access to African-sourced capital,” Lloyd said.

He added that recent drilling at Kabwe has continued to demonstrate strong mineral potential, with early indications pointing to zinc grades above historical averages.

Market positioning and next steps

Following the first tranche admission and issuance of additional shares tied to the debt restructuring, Shuka Minerals’ total issued share capital will rise to over 143 million shares.

The company, listed on London’s AIM market with a secondary listing on Johannesburg’s AltX, is expected to complete the second tranche of the subscription by the end of August 2026.

As it strengthens its financial position and advances exploration activities, Shuka Minerals is betting on improved market recognition of Kabwe’s underlying value, even as competition and funding pressures persist across Africa’s mining sector.