Shuka Minerals Secures £750,000 Investment from Zambian Firm Menel Energy in Strategic Share Subscription

Menel Energy Becomes Strategic Shareholder in Shuka Minerals

Menel Energy and Resources Limited, a privately owned Zambian investment company specializing in natural resources, has become a key strategic investor in Shuka Minerals through a conditional £750,000 subscription. This investment entails issuing 18,750,000 new ordinary shares at 4 pence each, with admission to AIM split into two equal tranches of 9,375,000 shares. The first tranche of £375,000 has already been received in cleared funds, with the second tranche expected by 31 August 2026. Upon admission of all subscription and fee shares, Menel will hold roughly 12.3% of Shuka Minerals’ enlarged issued share capital.

Menel is wholly owned by Menel Management Services Limited, controlled by Munakupya Hantuba and Valentine Chitalu, experienced investors in the African natural resources sector. Menel previously invested approximately US$6.94 million in GoviEx Uranium Inc. in 2025, acquiring a 13.6% stake, and has participated in various Zambian and southern African mining projects. The subscription price of 4 pence per share represents a 53.9% premium over the closing mid-market price of 2.6 pence on 21 July 2026. Menel will also receive warrants to subscribe for up to an additional 18,750,000 shares at 8 pence each, exercisable until 8 July 2029, offering further upside potential.

Board Appointment and Governance Enhancements with Menel

Following completion of the subscription and standard director onboarding procedures, Menel will have the right to appoint one non-executive director to Shuka Minerals’ Board. The anticipated appointee is Mr Tanda Syamunyangwa, CEO of Kanona Power Limited, who brings relevant expertise and local relationships to the company. This board representation underscores Menel’s strategic involvement and its commitment to active participation in Shuka Minerals’ governance and development.

The non-executive director appointment aligns interests between Menel and existing shareholders, providing governance oversight typical of significant new investors with operational experience in the resource sector. The appointment is subject to Shuka Minerals’ standard procedures, including background checks, regulatory compliance, and independence confirmation under exchange rules.

Revised Loan Terms with Gathoni Muchai Investments Limited (GMI)

Shuka Minerals has executed a Deed of Amendment and Restatement with GMI, modifying shareholder loan facilities initially agreed on 2 December 2024 and 27 June 2025. The original agreements allowed loans up to £2.0 million; as of the amendment, approximately £1,587,000 remains outstanding. The new terms extend the final repayment date to 31 December 2027, providing the company additional time to meet its obligations while advancing development projects.

The amendment requires a US$250,000 payment to GMI by 31 July 2026, reducing the principal by US$300,000 thereafter. The remaining loan balance is due by 31 December 2027, with provisions allowing interim repayments at the Board’s discretion considering working capital needs. Interest accrues daily at 8% per annum and is payable quarterly in cash or, at the company’s option, via new ordinary shares priced at 4 pence each.

Conversion and Warrant Rights Granted to GMI

The amended loan facility grants GMI conversion rights to exchange outstanding loan amounts into new ordinary shares at 4 pence per share, matching Menel’s subscription price. For every share issued upon conversion, GMI will receive one warrant to purchase an additional share at 8 pence, exercisable until 30 June 2028. These warrants include acceleration clauses triggered if the share price reaches 10 pence for 10 trading days within any 30-day period.

These provisions allow GMI to convert debt into equity, potentially benefiting from share price appreciation. The warrants offer further upside leverage, with an exercise price approximately triple the subscription price. Acceleration terms align GMI’s incentives with the company’s value creation goals through project advancement.

Restructuring Fee Paid to GMI via Share Issuance

In return for loan amendments and waivers, Shuka Minerals agreed to pay GMI a restructuring fee of 7.5% of the outstanding loan balance, amounting to £119,054.32. This fee will be settled by issuing 2,976,358 new ordinary shares at 4 pence each, preserving cash for operational use and loan repayments.

The fee shares will be admitted to AIM alongside the first tranche of Menel’s subscription shares, expected around 27 July 2026. These shares will rank equally with existing ordinary shares, granting GMI full dividend and capital rights. This equity-based fee settlement reflects either GMI’s confidence in Shuka Minerals’ prospects or near-term liquidity considerations.

Allocation of Subscription Proceeds to Loan Repayment and Kabwe Project

Proceeds from Menel’s £750,000 subscription will be allocated primarily to loan repayments and advancing the Kabwe zinc project. The first tranche (£375,000) will first cover payments due to GMI under the restructuring, with remaining funds supporting the drilling program and general working capital. The Kabwe project, Shuka’s flagship asset in Zambia, has a historical mined ore volume exceeding 14.5 million tonnes.

CEO Richard Lloyd highlighted that the 2026 drilling campaign continues to confirm the project’s potential, with significant mineralized intersections and preliminary XRF readings indicating zinc grades above historical averages. The remaining resource at Kabwe exceeds 5.7 million tonnes, including 700,000 tonnes of zinc, providing a substantial base for future production. Investment in drilling underscores management’s confidence in converting resources into economically viable reserves.

Impact on Share Capital and Shareholder Voting Rights

Following admission of the first tranche of 9,375,000 subscription shares and 2,976,358 fee shares, Shuka Minerals’ total issued share capital will be 143,387,497 ordinary shares, all carrying voting rights with no treasury shares held. This figure is important for FCA Disclosure Guidance and Transparency Rules notifications, which require shareholders to disclose holdings crossing thresholds such as 3%, 5%, and 10%.

The issuance will dilute existing shareholders’ voting power and economic interests unless they participate proportionally in future raises. Menel will hold approximately 12.3% of the enlarged share capital after full admission. GMI’s stake will depend on conversion rights exercised and fee shares received. The total 31,101,358 new shares issued (subscription plus fee shares) represent about 21.8% dilution on a fully diluted basis, a typical adjustment for a development-stage mining company raising growth capital.

Kabwe Project Valuation and Share Price Premium Context

CEO Richard Lloyd noted that despite the recent capital raises occurring at a premium to market price, the company’s valuation remains approximately 1% of the Phase 1 net present value (NPV) of the Kabwe project. This suggests significant undervaluation relative to the asset’s intrinsic economic value, assuming the NPV is based on reasonable assumptions.

Investors should carefully consider the assumptions behind the NPV, including commodity prices, operational costs, capital expenditures, and discount rates. Development-stage mining projects face risks including execution challenges, permitting, and commodity price volatility. The CEO’s mention of preliminary XRF zinc grades exceeding historical averages indicates ongoing exploration success, though further validation is required through comprehensive assays and metallurgical testing.

Admission Schedule and AIM Trading Details

Shuka Minerals will apply to the London Stock Exchange for admission of the first tranche of 9,375,000 subscription shares and 2,976,358 fee shares to AIM, with admission expected and trading commencing at 8:00 a.m. on or around 27 July 2026. The second tranche of 9,375,000 subscription shares will be admitted following receipt of funds by 31 August 2026, with a subsequent announcement to confirm.

All subscription and fee shares will rank pari passu with existing ordinary shares, entitling holders to equal dividends, capital distributions, and voting rights. This ensures no distinction between shares issued at different times or through different mechanisms once trading begins.

Strategic Importance of Menel Energy as Investor

Menel Energy and Resources Limited represents a strategically important investor beyond the £750,000 capital injection. Its proven track record in African natural resources, including a US$6.94 million investment in GoviEx Uranium Inc. and involvement in Zambian mining projects, indicates a hands-on approach to portfolio support. Controlled by Munakupya Hantuba and Valentine Chitalu, Menel demonstrates capacity and willingness to deploy significant capital into southern African resource opportunities, suggesting potential for future collaboration.

CEO Richard Lloyd emphasized Menel’s "extensive in-country experience and relationships, as well as significant access to African-sourced capital," which may facilitate additional financing for Kabwe’s development. For investors, the expertise and network of major shareholders can provide strategic value beyond immediate funding, including guidance, supply chain connections, and credibility with regulators and host governments.