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Volt Resources in-the-money options provide cash boost for Bunyu Graphite Project

The exercise of options is strongly supported by option holders.
Bunyu map
Bunyu Graphite Project has a resource of 461 million tonnes at 4.9% total graphitic content

Volt Resources Ltd (ASX:VRC) will use $4.7 million raised from the exercise of options to support its development strategy for the Bunyu Graphite Project in Tanzania.

The listed options exercise process was strongly supported by circa 90% of option holders.

There were more than 235 million options exercised at $0.02.

A shortfall of circa 24 million options was jointly underwritten and taken up by Empire Capital Partners Pty Ltd and Cove Capital Pty Ltd.

Cash position strengthened

Together with the $3.2 million raised in a recent share purchase plan and top-up placement, the company’s cash position has been strengthened.

Volt is also proceeding with a US$40 million Tanzanian bond issue financing with Exotix Capital.

The company’s strong cash position provides it with the financial capacity to progress stage I development of the flake graphite project.

Feasibility study nears completion

This includes a feasibility study, which is expected to be completed by the end of the first quarter of 2018.

Trevor Matthews, chief executive officer, said: “Volt is now strategically positioned to execute on a number of operational milestones as part of the stage I development of Bunyu.

“Key near-term deliverables to include finalisation of all project approvals and completion of the stage I feasibility study.”

READ: Volt Resources proceeds with issue of US$40 million in structured debt to fund Bunyu Graphite Project

Matthews said: “We will also concurrently advance our planned Tanzanian bond issue through our partnership with Exotix Capital aimed at securing the required funding for the development of Stage I.

“It is also worth noting the recent funding success of Tanzanian based Swala Oil & Gas PLC, with Exotix Capital placing an initial tranche of US$25 million.

“This demonstrates Exotix’s strength in financing selected high quality natural resource projects in Tanzania.”

Stage I strategy

Volt’s strategy for stage I is to annually process 400,000 tonnes of ore producing a nominal 20,000 tonnes of graphite products.

Stage I is intended to produce bulk graphite product which will satisfy an existing offtake agreement and the non-binding offtake agreements entered into with four potential Chinese customers.

The company aims to begin stage I construction this year.

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.

Bunyu resources

Bunyu is the largest JORC mineral resource deposit in Tanzania with 461 million tonnes at 4.9% total graphitic content (TGC) for 22.6 million tonnes of graphite.

This comprises 20 million tonnes of measured resources at 5.3% TGC, 155 million indicated tonnes at 5% TGC and 286 million tonnes of inferred resources at 4.9% TGC.

READ: Volt Resources paves way for Bunyu graphite mining license

Flake graphite prices remained strong in the December 2017 quarter with increases across all product sizes.

This was driven by increasing demand from lithium ion battery manufacturers and flame retardant building materials.

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