Quarterly Activities and Cashflow Reports

QUARTERLY ACTIVITIES AND CASHFLOW REPORTS (NOV 2017)

Volt provides shareholders with an update on activities for the three-month period ended 30 September 2017.

HIGHLIGHTS

  • Volt appoints experienced, well-qualified investment banking firm Exotix Capital to raise up to US$30 million via Tanzanian Bond Issue as funding for Stage 1 development
  • Offtake agreements progressing well, including:
    • Positive initial feedback received from potential Chinese offtake customer
    • North American offtake partner Nano Graphene Inc. ramps up graphene production and confirms premium quality of Bunyu graphite product
  • Capital raising initiative launched via a Share Purchase Plan.
    • Plan to be underwritten by Patersons Securities Limited and further sub-underwriting from two Volt Directors
  • Project name changed to Bunyu (previously Namangale)

 

Volt Resources Limited (ASX: VRC) (“Volt” or, the “Company”) is pleased to provide shareholders with an update on activities for the three-month period ended 30 September 2017.

Highlights for the quarter included the progression of key offtake agreements with positive results received from independent test work programs, advancement of Bunyu project development approvals and commencement of a Share Purchase Plan underwritten by Patersons Securities Limited and Directors of the Company.

COOPERATION AND OFFTAKE AGREEMENTS

During the quarter, Volt continued to advance discussions with China National Building Materials General Machinery (“CNBMGM”) and Guangxing Electrical Materials (“GEM”) (see ASX announcement “Volt Operational Update” dated 26 September 2017).

Product samples were sent to both CNBMGM and GEM to enable independent testing on the Bunyu Graphite product. Additional samples were also arranged for China-based AOYU Graphite. Assuming the product test work is successful, then offtake agreements totalling 15,000 – 20,000 tonnes per annum could be confirmed during Q4 2017.

Subsequent to the reporting period, positive initial product feedback was received from CNBMGM (see ASX announcement “Bunyu Graphite Test Work and Offtake Partner Update” dated 5 October 2017). Final results from the CNBMGM test work program are expected to be received in the coming weeks, and Volt will provide updates on additional offtake opportunities and test work programs conducted by other offtake partners in due course.

LEGISLATION CHANGES, KEY APPROVALS AND MINING LICENCE APPLICATION

The report for the ESIA (Environmental and Social Impact Assessment) and the RAP (Resettlement Action Plan), as noted in the previous quarterly report, was finalised. Volt is currently working in collaboration with the relevant government authorities, to ensure that the submission is compliant and expedites the grant of the mining license. Submission to the NEMC (National Environmental Management Council) is yet to be completed but is planned early in Q4 2017.

Three Bills passed through the Tanzanian Parliament containing changes to the legal framework governing the natural resources sector in Tanzania. Based on an initial review and external legal advice, the Board and Management believe the legislative changes – as passed by the Tanzanian parliament – would not cause or prevent Volt from progressing with its current business strategy and plans for the development of the Bunyu project (refer ASX announcement 7 July 2017).

With the post quarter appointment of Ms. Angellah Kairuki as the Mining Minister, Volt is looking forward to working with the Tanzanian Mines department in acquiring relevant approvals and developing the Stage 1 Bunyu Graphite Project.

BUNYU GRAPHITE PROJECT DEVELOPMENT

With the recent legislative changes in Tanzania, clarity on sample export was not available during the quarter. Therefore, the 1,000 tonnes bulk ore sample program with AOYU has not been progressed. Nevertheless, negotiations were able to be continued via the use of graphite product and ore samples from our existing inventory to enable AOYU to progress their assessment of the Bunyu graphite product.

EXPLORATION

The planned Bunyu Stage 1 Feasibility Study drilling program advised in the previous quarter was pegged out to facilitate landowner access agreements. Feedback received was exceptionally encouraging with landowners appreciative of the consultation and positive about the development of the area. Post completion of the Share Purchase Plan announced on 5 September 2017, drilling is expected to commence in November and be completed during Q4 2017. However, given the timing and the onset of the wet season, drilling will be concentrated on diamond core collection to facilitate sample availability for further metallurgical test work to refine process flow sheets, and to address pit geotechnical aspects of the proposed Stage 1 development.

Please note that in Section 9 of the Appendix 5B, the exploration and evaluation expenditure assumes the entire drilling programme is completed during the quarter.

UPDATE ON EXPANDABLE GRAPHITE MARKET

Under Volt’s strategy to supply graphite product to the expandable market, Volt announced to the market on 10 August 2017, positive expansion results for the Bunyu One (Namangale North) graphite product. As stated, “This outcome is very positive for Volt, as it means the mine plan can be optimised to source ore from any part of the project mineral resource to meet customer demand for expandable graphite.” Volt will be using the positive results, in collaboration with its agreement partners, in finalising offtake agreements in parallel with the completion of the Stage 1 Feasibility Study and arranging of project development funding.

CORPORATE ACTIVITY OVERVIEW

On 5 September 2017, Volt announced a Share Purchase Plan (SPP) to existing eligible shareholders. The SPP is underwritten by Patersons Securities Limited to $1,500,000 with further sub-underwriting by Volt Chairman, Asimwe Kabunga and Non-Executive Director, Matt Bull to $300,000 each. The funds raised will be deployed towards the following key objectives:

  • Complete the feasibility study for the Stage 1 development;
  • Continue further 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;
  • Support in-country costs associated with the Project; and
  • Fund general corporate and other expenses.

Post quarter end, the Company engaged Exotix Capital (“Exotix”) to undertake a Tanzanian Bond issue to raise up to US$30 million in structured debt to fund the Stage 1 development of the Company’s flagship Bunyu Graphite Project in Tanzania. If successful, the proposed bond issue financing will ensure that project development funding will be undertaken with minimal equity dilution.

Exotix will act as structuring, financial and placement advisor and will leverage its significant East African networks to complete the proposed Issue, with a key focus on the Tanzanian, Kenyan and Ugandan capital markets respectively.

During the quarter the Company changed the name of its operating subsidiary in Tanzania to Volt Graphite Tanzania Limited (“VGT”) from Nachi Resources Limited. The decision was made to ensure a clear relationship between VGT and its parent company Volt and to eliminate any confusion with other companies operating in Tanzania. In addition, Volt’s flagship project is now referred to as the Bunyu Graphite Project and no longer the Namangale Graphite Project

 

Appendix 5B

 

For and on behalf of Volt Resources Limited

Trevor Matthews
Chief Executive Officer

 


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For further information please contact:

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

Released through Sam Burns, Six Degrees Investor Relations, M: 0400 164 067