The company has entered into an option underwriting agreement with Empire Capital Partners and Cove Capital to guarantee the funds.
The two will act as joint underwriters to exercise any shortfall from the issue of options with an expiry date of 31 December 2017.
Company’s cash position strengthened
Together with the $3.2 million raised in a recent share purchase plan (SPP) and top-up placement, the company’s cash position has been strengthened.
This gives Volt the flexibility to deliver on near-term objectives, including fast-tracking stage I development of Bunyu.
The project has already demonstrated key pre-feasibility study project economics of US$1.3 billion NPV (pre-tax) with a 1.4 year payback.
Trevor Matthews, chief executive officer, said: “This is a significant development for the business as it shows confidence in our development plans for Bunyu Graphite Project.
“It provides a clear and flexible funding pathway for Volt’s immediate future.
“Following the recent oversubscribed SPP and placement, Volt now has a very healthy cash position.
“This enables us to fast-track a very focused and active development program for the project.”
Start of stage I construction expected in 2018
Matthews said: “We are targeting the commencement of stage I construction next year with development debt funding options well advanced.”
The Bunyu project is the largest JORC resource deposit in Tanzania with 461 million tonnes at 4.9% TGC (total graphitic content).
Volt recently established a pathway to obtain a mining licence for stage I following meetings with senior Tanzanian government and community officials.
A key takeaway from the meetings completed this week is that the positive benefits of an export-oriented industry are well understood by many within the Tanzanian government and community.
The development of Bunyu will significantly boost regional employment.
The company will provide skills and safety training for local people to participate in the project development, and provide opportunities for local and regional businesses.