South Africa’s Department of Mining and Mineral Resources has rejected Kazera Global’s appeal to grant a mining permit for its 60% owned Whale Head Minerals (WHM).

WHM expects to receive final documentation soon, which allows it to begin production operations of heavy mineral sands (HMS) at the Walviskop mine in South Africa.

Walviskop is located within the diamond mining operations of Kazera’s other South African subsidiary Deep Blue Minerals.

WHM has identified the opportunities represented by the HMS deposits, around 30km North of Port Nolloth in the Northern Cape province in 2016.

The company said that the potential mining permit if granted would allow it to mine a 5Ha beach sand deposit at the Walviskop mine.

Kazera chief executive officer Dennis Edmonds said: “This has been an incredible week for Kazera. We have been anticipating being granted the right to mine Walviskop since January of this year and to receive this news within a week of us concluding the Lithium investment announced last week is great timing.

“The rejection of the Appeal reflects our previously expressed confidence that the correct procedures had been followed by the Department in initially approving the Mining Permit.”

The UK-based investment company plans to generate a positive cash flow through ore production from the JORC-compliant resource at the Walviskop mine.

It expects to produce around 6,000 tonnes of HMS per month, booking an estimated gross profit of over $300,000 per month, within six months after receiving the mining permit.

Walviskop holds a JORC indicated mineral resource of 3.11 million tonnes of valuable heavy minerals, predominantly Garnet and Ilmenite, at a grade of 61.2%.

Kazera said that potential partners have already been identified to build the Walviskop processing plant, and the independently determined mine value is around £150m.

Furthermore, WHM has applied for a prospecting right over an adjacent beach, which the company expects to hold similar characteristics to Walviskop and is around 34 times larger.

Kazera plans to fund the start-up costs of the Walviskop mine, through cash flows from Alexander Bay diamond mine in South Africa and Tantalum Valley Mine in Namibia.