Volt Resources (ASX:VRC) has elected to increase its share purchase plan (SPP) limit from $1.5 million after receiving over $2.3 million in applications.
The heavily oversubscribed SPP closed 25 October 2017 and will see $2.33 million worth of shares issued at $0.021.
Funds raised will be used to fund the completion of the feasibility study for the Stage 1 development of the Bunyu Graphite Project located in Tanzania.
Recently, the company engaged Exotix Capital to undertake a Tanzanian Bond issue to raise up to US$30 million in structured debt to fund the Stage 1 development.
If successful, the proposed bond issue financing will ensure that project development funding will be undertaken with minimal equity dilution.
Use of funds
The funds raised under the SPP will used for objectives including:
- Complete the feasibility study for the Stage 1 Bunyu graphite project development;
- Continue development funding negotiations, obtain project development approvals, advance offtake and cooperation agreements into binding agreements, enter into engineering and construction agreements and other material contracts for the Stage 1 development; and
- Support in-country costs associated with the project.
Off-take agreements in place
Volt continues to advance discussions with China National Building Materials General Machinery (CNBMGM) and Guangxing Electrical Materials (GEM).
Product samples were sent to both CNBMGM and GEM to enable independent testing on the Bunyu Graphite product.
Positive initial product feedback was received from CNBMGM and final results from the test work program are expected to be received in the coming weeks.
Additional samples were also arranged for China-based AOYU Graphite.
Assuming the product test work is successful, then offtake agreements totalling 15,000 to 20,000 tonnes per annum could be confirmed during Q4 2017.