Month: August 2018

VOLT SIGNS SECOND BINDING OFF-TAKE AGREEMENT FOR BUNYU GRAPHITE PROJECT

VOLT SIGNS SECOND BINDING OFF-TAKE AGREEMENT FOR BUNYU GRAPHITE PROJECT

Highlights:

  • Binding offtake agreement signed with major Chinese graphite company – Qingdao Tiangshengda Graphite – for 9,000 tonnes per annum of Bunyu Graphite Product over 5 years
  • Nominal 10,000tpa of Stage 1 production now committed via binding offtake agreements when combined with the binding offtake agreement with US based graphene company Nano Graphene Inc (NGI)
  • Negotiations continuing for additional binding offtake for the Stage 1 development

Tanzanian focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to announce another key milestone for the Bunyu Graphite Project Stage 1 development, with the signing of a binding sales agreement (“the Agreement”), by 100% Volt subsidiary, Volt Graphite Tanzania Ltd, with Qingdao Tianshengda Graphite Co. Ltd. (“Tianshengda”) for 9,000 tonnes per annum of Bunyu Graphite Product over five years.

Tianshengda is an integrated graphite processor and distributor across China and internationally. Based in Laiki City, Shangdong Province, Tianshengda has a substantial annual capacity to further process graphite by producing value-added products including expandable graphite, flake graphite and powder, as well as supplying graphite to the lithium-ion battery market. The Agreement covers 9,000 tonnes per year of Bunyu Graphite Product for five years, with an option for a further five year term by mutual agreement. The Agreement will incorporate the size ranges of products to be produced in both the Stage 1 development and the planned expansion to Stage 2 at Bunyu.

The Agreement is conditional upon Volt Graphite Tanzania (“VGT”) confirming that it has completed the construction and commissioning of the Stage 1 Project for mine development and upon completion of the processing plant for the treatment of sufficient ore from the Project.

The selling price under the Agreement will be in USD and CIF Qingdao Port, China. The price will be determined by the prevailing market price for flake graphite products, adjusted for mesh size and TGC %, and agreed prior to the commencement of each contract half year. Importantly, this provides VGT and the Bunyu Project exposure to the anticipated growing demand and stronger prices for quality flake graphite.

Board and Management Commentary:

Volt’s Chief Executive Officer, Trevor Matthews, commented:

“We are very pleased to secure this significant binding sales agreement for our Bunyu Product, and we are delighted to be partnering with such a highly-respected company such as Tianshengda. “Furthermore, this second binding offtake agreement is a strong validation of the confidence in Volt’s Bunyu Graphite project. With strong demand in the market and in particular for large flake graphite, we are continuing to progress discussions with additional parties in respect to further offtake opportunities. “Looking ahead we now remain firmly focused on driving the Bunyu Project towards first production and we look forward to providing shareholders with further updates on corporate and operational progress in the near-term.”

For and on behalf of Volt Resources Limited

Trevor Matthews
Chief Executive Officer

 


FOR PERSONAL USE ONLY
For further information please contact:

Trevor Matthews – Chief Executive Officer
Tel: +61 8 9486 7788

Posted by Volt Resources in Company News
QUARTERLY ACTIVITIES REPORT TO 30 JUNE 2018

QUARTERLY ACTIVITIES REPORT TO 30 JUNE 2018

Highlights

  • Volt completes Stage 1 Feasibility Study post-quarter end for the flagship Bunyu Graphite Project in Tanzania.
    • Stage 1 based on a mining and processing plant annual throughput rate of 400,000 tonnes of ore to produce on average 23,700tpa of graphite products positioning Volt as a meaningful participant in the global flake graphite market;
    • Stage 1 financial analysis showed favourable NPV and IRR over a payback period of 4.4 years;
    • Pre-tax NPV (10%) of US$18.6M;
    • Pre-tax IRR of 21.0%;
    • EBITDA of US$93.6M over 7 year Stage 1 project period – average annual EBITDA of $US13.1M;
    • Stage 1 FS indicates average FOB operating cost of US$664 per tonne and start-up capital cost estimate of US$31.8M;
  • Key objective of Stage 1 development is to establish infrastructure and market position in support of the development of the significantly larger Stage 2 expansion project.
  • Draft prospectus for the US$40 million Tanzanian Note Issue under review with the Tanzanian Capital Markets and Securities Authority (CMSA) and the Dar es Salaam Stock Exchange (DSE)
  • $2,000,000 placement completed, funds to be deployed towards repaying the Convertible Loan Facility and working capital requirements at Bunyu Project
  • Additional offtake agreements continue to be advanced following positive meetings with potential Chinese partners
  • Resettlement Action Plan (RAP) compensation process completed
  • Environmental and Social Impact Statement (ESIS) for Bunyu Graphite Project under review – key step towards Stage 1 development and production

Volt Resources Limited (ASX: VRC) (“Volt” or, the “Company”) is pleased to provide shareholders with its quarterly activities report for the period ended 30 June 2018.

Management Commentary

Volt Resources CEO Trevor Matthews commented:

“The June quarter represented an important period of consolidation for the Company, with the Stage 1 Feasibility Study now complete, which represents an important step forward in Volt’s strategy to become one of leading global producers of natural coarse flake graphite.

“From a funding perspective, we are continuing to make good progress in regards to our US$40 million Tanzanian Note issue, which will provide the capital to fund the Stage 1 development of Bunyu.

“With a number of key approvals and funding developments on the horizon, we expect the September quarter to be another highly productive period for the business as we move towards the first production from Bunyu.”

June Quarter Activities Review

Stage 1 Feasibility Study

Post quarter end, the Company completed the Feasibility Study (“FS”) into the Stage 1 development of the flagship Bunyu Graphite Project located in Tanzania (Refer ASX announcement dated 30 July 2018, released 31 July 2018).

The Stage 1 development is focussed on the development of a nominal 20,000 to 24,000tpa graphite mine and processing facility in Tanzania with exports of graphite products planned into the USA, China and other markets.

The development incorporates a significant amount of infrastructure, utilities and mine development work that benefits the Stage 2 expansion including the site access road, plant laydown area, tailings storage facility, waste dumps, stockpile areas, open pit development, mining operations, accommodation village and water supply.

The proposed Stage 2 development is an expansion of Stage 1 production based on the market demand for Bunyu’s graphite products and leveraging the large-scale graphite mineral resource and Bunyu’s close proximity to critical infrastructure. The Stage 2 expansion is targeted to meet expected significant increases in demand for coarse flake graphite in the expandable graphite market and fine flake size products for battery anode material and other existing and evolving industrial uses for micro carbon products.

During the Stage 1 FS the Company, working with its Tanzanian subsidiary, Volt Graphite Tanzania Ltd (VGT) also conducted the following activities:

  • Completed and lodged the Environmental and Social Impact Study (ESIS). The ESIS has been reviewed by the NEMC and Technical Advisory Committee which has involved a site visit and technical review meetings and is now in the final stage for the Minister for Environment approval. It is important to note the environmental approval incorporates the area to be developed under Stage 1 and the Stage 2 expansion.
  • Lodged two Mining Licence (“ML”) applications covering the 18km2 footprint for Stage 1 and the Stage 2 expansion. The recent appointment of the Mining Commission has resulted in a large number of licence applications being approved. Once the environmental approval is obtained, the Company expects the mining licences to be approved soon thereafter.
  • Completed the Resettlement Action Plan and received all approvals for the compensation arrangements with approximately 1,000 people either farming or living within the mining licences area.

Offtake Agreements Advanced

Volt’s management team visited China in April to advance discussions on binding offtake agreements for the Bunyu Graphite Project.

Meetings were held with CNBM General Technology (formerly known as CNBMGM), GEM, Tianshengda and two new groups, Haida and Baixing, to progress offtake agreements or commence exchange of project information and product samples for longer term supply arrangements.

The feedback received following the meetings indicated strong demand for coarse flake material above 100 mesh (150 micron) in size for use in the expandable graphite market, which strongly supports Volt’s strategy to become a primary expandable graphite supplier. The parties are now progressing with exchanging draft binding offtake agreements in relation to Stage1 offtake. Further updates on these discussions will be provided to shareholders in due course.

Volt and Tianshengda

Figure 1 (L-R) : Trevor Matthews (Volt) and Mr Shu (Tianshengda)

 

Volt and GEM

Figure 2 (L-R) : Mark Hoffman (Volt), Mr Gao Hongguo (GEM) and Trevor Matthews (Volt)

 

Resettlement Action Plan Completed

As previously advised (see “Bunyu Update” ASX Announcement dated 17 April 2018), the Resettlement Action Plan (RAP) compensation process has now been completed and the associated Valuation Report of compensation payable to people affected by the Bunyu Project development has been approved by the Government Chief Valuer and has been approved at the district and regional level.

Volt continues to work closely with relevant government authorities to ensure the process is compliant with Tanzanian legislation and to appropriately compensate all people affected by the project development.

The drafting of the implementation plan for the RAP is ongoing.

Bunyu Graphite Project Key Approvals

Earlier this year, the Company lodged its Environmental and Social Impact Study (“ESIA”) with the National Environmental Management Council (ASX announcement dated 23 January 2018), and its Mining Licence Applications (“MLA’s”) with the Ministry of Energy and Minerals of Tanzania, which will incorporate the footprint for Stages 1 and 2 of the Bunyu Project.

Volt received positive initial feedback regarding both the the ESIA and the MLAs during the quarter, and as advised (see “CEO Update” ASX Announcement from 7 June), the Company expects final approvals to be granted in the September quarter.

US$40 million Tanzanian Note Issue Draft Prospectus

The draft prospectus for the US$40 million Note Issue that has been lodged with the Tanzanian Capital Markets and Securities Authority (“CMSA”) and the Dar es Salaam Stock Exchange (“DSE”) is currently under review with comments received from both the DSE and CMSA being incorporated into the draft prospectus.

An updated prospectus which incorporates the Stage 1 Feasibility Study results, is in the process of being re-lodged with both regulators. Once the prospectus content has been agreed with the regulators, the Company will soon thereafter proceed with the issue of the prospectus to sophisticated investors in the East African financial markets to raise the Bunyu project development funds.

Corporate Activity Overview

During the quarter, Volt received binding commitments for a share placement to raise $2 million (before costs). Patersons Securities (“Patersons”) acted as the Lead Manager to the Placement, with the majority of the shares being subscribed for by institutional investors.

Under the Placement, Volt issued 86,956,523 new fully paid ordinary shares to sophisticated and professional investors at A$0.023 per share.

Funds received will be deployed towards repaying the Convertible Loan Facility (see ASX Announcement dated 7 July 2017), and towards working capital requirements incurred as Volt progresses its project approvals and financing programs in Tanzania.

Resignation of Non-Executive Director

Post-quarter end, Matthew Bull tendered his resignation as Non-Executive Director of the Company, effective 9 July 2018.

Appendix 5B

Posted by Volt Resources in Company News
POSITIVE STAGE 1 FEASIBILITY STUDY FOR BUNYU GRAPHITE PROJECT

POSITIVE STAGE 1 FEASIBILITY STUDY FOR BUNYU GRAPHITE PROJECT

Stage 1 Feasibility Study Highlights:

  • Key objective of Stage 1 development is to establish infrastructure and market position in support of the development of the significantly larger Stage 2 expansion project
  • Stage 1 based on a mining and processing plant annual throughput rate of 400,000 tonnes of ore to produce on average 23,700tpa of graphite products positioning Volt as a meaningful participant in the global flake graphite market
  • Stage 1 financial analysis delivers favourable NPV and IRR over a payback period of 4.4 years o Pre-tax NPV (10%) of US$18.6M o Pre-tax IRR 21.0%
  • Total EBITDA of US$93.6M over 7 year Stage 1 project period – average annual EBITDA of US$13.1M
  • Development schedule of 12 months to first ore production – project development approvals and Stage 1 funding initiatives are well advanced
  • Stage 1 FS indicates average FOB operating cost of US$664 per tonne and start-up capital cost estimate of US$31.8M
  • Stage 1 development incorporates a significant amount of infrastructure, utilities and mine development work that benefits the Stage 2 expansion
  • DFS for Stage 2 is planned to proceed concurrent with Stage 1 project development
  • Volt currently completing the final binding offtake agreements for substantially all of Stage 1 annual production

Tanzanian focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to report the completion of the Feasibility Study (“FS”) into the Stage 1 development of the Company’s flagship Bunyu Graphite Project located in Tanzania.

Board and Management Commentary

Volt’s Chief Executive Officer, Trevor Matthews, commented:

“The Stage 1 Feasibility Study is another important step forward in Volt’s plan to become one of the top three global producers of natural flake graphite.

“The Company has been implementing a two stage development strategy following the completion of a large scale Pre-Feasibility Study (“PFS”) in December 2016. Concurrent with the PFS completion, Volt announced the largest graphite JORC Mineral Resource in Tanzania and one of the largest in the world.

“Following a detailed strategic review of product markets and financial markets, in May 2017 Volt announced a clear pathway to transition the Company into a globally significant producer of material quantities of high quality graphite products. It was decided that this accelerated pathway would be achieved via the development of the Bunyu Project over two stages.

Stage 1 is focussed on the development of a nominal 20,000 to 25,000tpa graphite mine and processing facility in Tanzania with planned exports of graphite products into the USA, China and other markets. The proposed Stage 2 development is an expansion of Stage 1 production based on the market demand for Bunyu’s graphite products and leveraging the large scale graphite mineral resource and Bunyu’s close proximity to critical infrastructure. The Stage 2 expansion is targeted to meet expected significant increases in demand for coarse flake graphite in the expandable graphite market and fine flake size products for battery anode material and other existing and evolving industrial uses for micro carbon products.”

Volt’s Non-Executive Chairman, Asimwe Kabunga, commented:

“This is an exciting period for the Company and its shareholders as we work on this important near-term transition from developer to producer. The delivery of a robust Stage 1 Feasibility Study is a key step towards unlocking the considerable underlying value of our world-class Bunyu Project. Once funding is obtained, the Company will proceed with the Front End Engineering and Design for Stage 1 and place orders for long lead time components. Concurrent with the Stage 1 development, Volt also plans to commence work on the definitive feasibility study for the Stage 2 expansion.”

Development Update

During the Stage 1 Feasibility Study the Company working with its Tanzanian subsidiary, Volt Graphite Tanzania Ltd (VGT), has also conducted the following activities:

  • Completed and lodged the Environmental and Social Impact Study (ESIS). The ESIS has been reviewed by the NEMC and Technical Advisory Committee which has involved a site visit and technical review meetings and is now in the final stage prior to forwarding to the Minister for Environment for approval. It is important to note the environmental approval incorporates the area to be developed under Stage 1 and the Stage 2 expansion.
  • Lodged two Mining Licence (“ML”) applications covering the 18km2 footprint for Stage 1 and the Stage 2 expansion. The recent appointment of the Mining Commission has resulted in a large number of licence applications being approved. Once the environmental approval is obtained, the Company expects the mining licences to be approved soon thereafter.
  • Completed the Resettlement Action Plan and received all approvals for the compensation arrangements with approximately 1,100 people either farming and/or living within the mining licences area. This is an important milestone as without the compensation arrangements being approved, the Bunyu Project would not be able to proceed to development. As explained previously the footprint that the compensation area covers incorporates the Stage 1 and Stage 2 expansion project.
  • Held meetings with Volt’s graphite offtake partners and now completing the final binding offtake agreements for substantially all of Stage 1 annual production. These offtake agreements are in addition to the existing binding offtake agreement with US based graphene company, Nano Graphene Incorporated.
  • Progressed with the development funding of Stage 1 through the planned issue of US$40m of Tanzanian listed Notes (Bonds). With the assistance of the Company’s advisors Exotix Capital, Orbit (sponsoring broker), Clyde and Co (legal) and Ernst & Young (Reporting Accountant) the Company has prepared and lodged a prospectus with the Tanzanian regulators, the Dar es Salaam Stock Exchange and the Capital Markets and Securities Authority for their review and approval. Comments on the prospectus have now been received from both regulators and the Company is engaged in finalising the changes to the prospectus requested and some additional matters discussed with the CMSA. Once the content of the prospectus and other matters have been agreed, the Company will proceed to issue the prospectus to qualified institutional buyers and sophisticated investors in East Africa. The prospectus remains open for 10 business days following which the Company will proceed to a development decision on the Bunyu Stage 1 project.

The Stage 1 development incorporates a significant amount of infrastructure, utilities and mine development work that benefits the Stage 2 expansion including the site access road, plant laydown area, tailings storage facility, waste dumps, stockpile areas, open pit development and mining, accommodation village, water supply, etc.

Read Stage 1 Feasibility Study Report

 

Posted by Volt Resources in Company News