Company News

QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER 2018

QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER 2018

Highlights

  • Feasibility Study completed for the initial Stage 1 start-up operations at flagship Bunyu
    Graphite Project in Tanzania – key outcomes include:

    • Stage 1 based on a mining and processing plant annual throughput rate of 400,000
      tonnes to produce 20,000 to 24,000tpa of graphite products
    • Average FOB operating cost of US$658 per tonne and start-up capital cost
      estimate of US$31.6M
    • Pre-tax NPV10 of US$19.5M
    • Pre-tax IRR of 21.6%
    • EBITDA of US$94.5M over 7-year project life
  • Key approvals granted during the quarter for Stage 1 and 2 developments at Bunyu:
    • Environmental and Social Impact Statement approved
    • Mining Licences for Bunyu secured post-quarter end
  • Binding offtake agreement signed with major Chinese graphite company Qingdao
    Tiangshengda Graphite for 9,000 tpa of Bunyu product over five years
  • Amended prospectus for the US$40 million Tanzanian Note Issue lodged with the
    Tanzanian Capital Markets and Securities Authority (CMSA) and the Dar es Salaam Stock
    Exchange (DSE) – note issue process advancing.

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

September Quarter Activities Review

Stage 1 Feasibility Study Completed

During the quarter, the Company completed the Feasibility Study (“FS”) into the Stage 1 development of the flagship Bunyu Graphite Project (“Bunyu”) located in Tanzania.

The Stage 1 development is focused on the development of a 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 will deliver significant benefits to 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 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.

Stage 2 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.

Key Bunyu Project Approvals Granted

The Company was also pleased to advise that during the quarter it received confirmation that two key project approvals had been granted for Bunyu. This ensures that all requisite environmental and regulatory approvals have now been accounted for in relation to the respective Stage 1 and 2 developments at Bunyu.

With the development of Bunyu now fully-approved, Volt is well placed to fast-track the start-up of production at the Stage 1 development.

Bunyu Environmental Approvals
In August, the Environmental Impact Assessment (EIA)  Certificate for Bunyu was granted by the National Environment Management Council of Tanzania to the Company’s 100%-owned subsidiary Volt Graphite Tanzania (“VGT”).

The EIA certificate represented the final pre-requisite for the granting of Volt’s Mining Licence (granted post-quarter end) and one of the final remaining major milestones in terms of Government permitting for Bunyu.

Volt’s Environmental and Social Impact Study submission was prepared in accordance with the requirements of relevant Tanzanian legislation, including the Environmental Management Act 2004; the Environmental Impact Assessment and Audit Regulations 2005 as well as the Mineral Sector Environmental Impact Assessment Guidelines 2014.

Bunyu Mining Licence Applications Granted
Post-quarter end, Volt was granted two Mining Licences (MLs) ML 591/2018 and ML 592/2018 covering Bunyu’s respective Stage 1 and Stage 2 developments from the Mining Commission of the Ministry of Minerals of Tanzania.

The Company formally received the MLs on 22 October 2018.

The granting of the MLs represented a major step forward, as the Company focuses on advancing the Bunyu Project towards Stage 1 production.

Community Relations
Volt Graphite Tanzania (VGT) management systems continue to mature with local communities being updated on the ongoing and planned project development activities through monthly update reports, Relocation Working Group meetings and meetings with the ward and village leaders.

The Lindi District Council’s Economic, Work & Environmental Committee visited the Bunyu 1 site in September and were impressed with the planned developments and continue to be supportive of the planned development. VGT initiated and sponsored the development of a formal Village Land Use Plan (VLUP) with the report generated last quarter and approved by the District Council on 31 July 2018.

The Lindi District Council’s Economic, Work & Environmental Committee Visit

The Lindi District Council’s Economic, Work & Environmental Committee Visit

 

Amongst VGT’s local financial contributions as part of its social investment program, the Company continued to pay a monthly allowance to Nursery School teachers at Utimbula village, donated desks for Utimbula Nursery School and financially contributed to the repair of storm damage at Namangale Primary School.

Offtake Agreements Signed
During the quarter, VGT signed a binding sales agreement with Qingdao Tianshengda Graphite Co. Ltd. (“Tianshengda”) for 9,000 tonnes per annum of Bunyu Graphite Product over five years.

Importantly, this represents the second binding offtake agreement signed by VGT, following the agreement signed in March 2017 with US based graphene company Nano Graphene Inc (NGI) for a minimum 5,000 tpa of flake graphite product over 5 years.

An integrated graphite processor and distributor across China and internationally, 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. There is an option for a further five-year term by mutual agreement as part of the sales agreement.

Furthermore, during the quarter VGT signed a cooperation agreement with one of China’s largest graphite companies, HAIDA Graphite (“HAIDA”).

Under the agreement, VGT and HAIDA exchange relevant information and conduct testing on VGT’s graphite product samples in order to build a working relationship between the two parties for the future supply and purchase of Bunyu Graphite Product.

Further discussions are continuing with additional parties in respect to additional offtake  opportunities and the Company looks forward to updating shareholders on these discussions in due course.

Corporate Activity

US$40 million Tanzanian Prospectus Update
As previously advised, Volt has partnered with Exotix Capital to undertake a Tanzanian Note issue to raise the required funding for the Stage 1 development at Bunyu (see ASX Announcement dated 25 October 2017).

During the quarter, the Company continued to advance the US$40 million Note Issue, for which an updated Prospectus was lodged with the Tanzanian Capital Markets and Securities Authority (“CMSA”) and the Dar Es Salaam Stock Exchange (“DSE”) on 17 August.

A further updated Prospectus was lodged with the CMSA on 28 September following feedback and requests for additional information. Correspondence with the CMSA has been ongoing and positive, and the Company expects this process to be finalised this quarter enabling VGT to proceed with the issue of the Note prospectus and commence the raising of development funding for the Stage 1 Bunyu project.

Resignation – Non-Executive Director
On 9 July 2018, Matthew Bull resigned as Non-Executive Director of the Company.

Cash Position and Mid-Term Funding
The Company finished the 30 September 2018 quarter with $420k in cash. Expenditure during the quarter included the repayment of convertible loans and accrued interest, payments to complete the Stage 1 Feasibility Study, Tanzanian related expenditure to complete the environmental approvals, advisor fees for the note prospectus and community relations activities.

The Company has progressed an assessment of its Research and Development claim for the 2017/18 fiscal year and is pleased to advise it will progress a loan with Radium Capital of approximately $510k to be received this quarter. This is an advance against the future proceeds to be received from the R and D claim once the Company completes and lodges its 2018 tax return.

In addition, the Company is currently reviewing proposals for bridge funding through to Q2 2019 while it completes the Tanzanian note issue in the short term.

Management Commentary
Volt Resources CEO Trevor Matthews commented:

“I am very pleased to report that a number of key milestones, both on a corporate and operational front, were delivered during the September quarter, collectively positioning Volt closer towards becoming a leading near-term producer of natural flake graphite from Bunyu.

“A noteworthy highlight was the completion of the Stage 1 Feasibility Study which outlined a set of robust parameters for the Stage 1 start-up operations, albeit on a significantly smaller scale in relation to our proposed Stage 2 expansion project which represents the big picture and future upside for Volt and its shareholders.

“Our funding initiatives, led by our Tanzanian note issue, are progressing well and following the satisfaction of a number of regulatory requirements we are confident of progressing with the note issue during this current quarter. Once finalised, Volt will narrow our focus towards commencing Stage 1 construction and production at Bunyu.

“I would also like to thank the relevant Tanzanian authorities for their continued support during the quarter in assisting Volt towards securing the approvals needed to advance Bunyu’s development. We maintain a very positive and transparent dialogue with our Tanzanian stakeholders and look forward to further solidifying this relationship.”

 

For and on behalf of Volt Resources Limited

Trevor Matthews
Chief Executive Officer

 

APPENDIX 5B

 


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
VOLT RECEIVES BUNYU MINING LICENCES

VOLT RECEIVES BUNYU MINING LICENCES

Tanzanian-focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the
Company”) is pleased to advise that it has formally received mining licences ML 591/2018 and ML 592/2018
from the Mining Commission of the Ministry of Minerals of Tanzania. As previously advised the two Mining
Licences cover the respective Stage 1 and Stage 2 developments of the Bunyu Graphite Project.

The two ML’s cover a combined area of 17.71km2 and provide Volt with the exclusive right to develop the
graphite resources in the ML area. The ML’s are effective for a period of 10 years and there is a right of
further 10 year renewals under section 53 of the Mining Act.

 

Volt Mine Layout

Stage 1 & Stage 2 Project Layout

 

Now that the Company has formally received the ML’s, the completion of the Tanzanian Note Issue for the
Bunyu development is the remaining key milestone prior to Volt’s subsidiary Volt Graphite Tanzania Ltd
(VGT) proceeding with front end engineering and design work for the initial Stage 1 operations and the
ordering of long lead time components.

Concurrently with the Stage 1 development, VGT plans to be undertaking the Definitive Feasibility Study
on the large-scale Stage 2 expansion at Bunyu.

 

For and on behalf of Volt Resources Limited

Trevor Matthews
Chief Executive Officer

1 Refer to Volt’s ASX announcement titled “Positive Stage 1 Feasibility Study Bunyu Graphite Project” dated 31 July 2018. The Company confirms that it is not aware of any new information or data that materially affects the information included in this document and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.

 


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Tel: +61 8 9486 7788

Posted by Volt Resources in Company News
BUNYU MINING LICENCES GRANTED

BUNYU MINING LICENCES GRANTED

Tanzanian-focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to advise that it has been notified by the Mining Commission of the Ministry of Minerals of Tanzania of the grant of the two Mining Licences covering the respective Stage 1 and Stage 2 developments of the Bunyu Graphite Project.

The Mining Licences (ML’s) have been granted subject to three conditions:

  1. An acceptance of the boundaries and co-ordinates as per the application as amended;
  2. Notice by the Company to accept the proposed licence; and
  3. Payment of US$1,000 in preparation fees for each licence.

Volt advises shareholders that it plans to accept or meet the licence conditions outlined above. The grant of the mining licences is a major step forward, as the Company focuses on advancing the Bunyu Project towards Stage 1 production and follows the completion of the Stage 1 Feasibility Study (see ASX Announcement dated 31 July 2018) and the finalisation of all required Environmental Approvals (see ASX Announcement dated 4 September 2018).

Bunyu Graphite Project – Accelerated Pathway to Production

As previously advised, Volt’s near-term focus remains firmly on the successful completion of the proposed US$40 million Note Issue, for which an updated Prospectus and accompanying documentation has been lodged with the Tanzanian Capital Markets and Securities Authority (“CMSA”) on 29 September 2018.

This process continues to advance in line with previous guidance and further updates will be provided in due course. Following the formal receipt of the ML’s, the completion of the Tanzanian Note Issue for the Bunyu development and approval by the Volt Board, Volt’s subsidiary Volt Graphite Tanzania Ltd (VGT) will proceed with front end engineering and design work for the initial Stage 1 operations and the ordering of long lead time components.

Concurrently with the Stage 1 development, VGT plans to be undertaking the Definitive Feasibility Study on the large-scale Stage 2 expansion at Bunyu.

Volt’s Chairman, Asimwe Kabunga, commented:

“This is a key milestone for Volt and our shareholders, as we have now effectively received all required primary development approvals in relation to our planned Stage 1 and 2 developments at the Bunyu graphite project in Tanzania.”

“Volt has maintained a very transparent and positive dialogue with the Tanzanian authorities throughout the entire approvals process, and I would like to thank the relevant authorities for their support and input towards achieving these key approvals.”

“The Company looks forward to continuing to work with the Tanzanian authorities over the coming months as we near the start-up of operations from our Stage 1 development.”

 

For and on behalf of Volt Resources Limited

Trevor Matthews
Chief Executive Officer

 


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Trevor Matthews – Chief Executive Officer
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Posted by Volt Resources in Company News
BUNYU PROJECT MINING LICENCE APPLICATIONS ADVANCED

BUNYU PROJECT MINING LICENCE APPLICATIONS ADVANCED

Tanzanian-focused flake graphite developer Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to advise that the two Mining License Applications (“MLA”) for the Company’s Bunyu Graphite Project have been recommended for approval within the Tanzanian Ministry of Minerals online Cadastral system.

As previously advised (see ASX announcement dated 8 February 2018), Volt has lodged two MLA’s with the Ministry of Minerals of Tanzania which covers the footprint for both the Stage 1 and 2 developments at the Bunyu Graphite Project.

This recommendation represents an encouraging step forward in the MLA approval process, however this status change does not constitute final approval and receipt of the ML’s. Further updates on the ML approval process will be provided to shareholders in due course.

Tanzanian Note Issue Prospectus Update

Volt continues to advance the US$40 million Note Issue, for which an updated Prospectus was lodged with the Tanzanian Capital Markets and Securities Authority (“CMSA”) and the Dar es Salaam Stock Exchange (“DSE”) on August 17, 2018.

Correspondence with the CMSA has been ongoing and positive with the Company preparing to lodge a further update of the Prospectus and associated documents. Volt is satisfied with the recent progress in relation to regulatory approval of the Prospectus with a conclusion expected in the near future.

For and on behalf of Volt Resources Limited

Trevor Matthews
Chief Executive Officer

 


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Trevor Matthews – Chief Executive Officer
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Posted by Volt Resources in Company News
ENVIRONMENTAL APPROVAL RECEIVED FOR BUNYU GRAPHITE PROJECT

ENVIRONMENTAL APPROVAL RECEIVED FOR BUNYU GRAPHITE PROJECT

Tanzanian focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to report the completion of another key milestone in the development of the Bunyu Graphite Project, with the Company’s wholly-owned subsidiary Volt Graphite Tanzania Ltd, having received the Environmental Impact Assessment (EIA) Certificate from the National Environment Management Council of Tanzania (NEMC).

Importantly, the EIA certificate signed by the Honourable Minister of State in Vice President’s Office for Union Affairs and Environment Hon. January Makamba, represents the final pre-requisite for the granting of Volt’s Mining Licence (ML) and one of the final remaining major milestones in terms of Government permitting for the Bunyu Graphite Project.

The Bunyu Mining Licence Applications (MLA’s) were submitted to the Minister for Minerals in February 2018 (see ASX release dated 8 February 2018). Recently the Tanzanian Minerals Commission issued revised formats for the Integrity Pledge and Local Content Plan to be submitted with the Company’s MLA’s.

These have been completed and lodged with the Commission. Once the EIA certificate is lodged with the Commission the Company expects the two ML’s to be granted soon thereafter.

The Bunyu MLA’s and EIA certificate, along with the previously advised approval of the resettlement
compensation under the Resettlement Action Plan (ASX announcement dated 30 April 2018), covers the area required for the Stage 1 development and Stage 2 Expansion Project.

Bunyu North Pit

Bunyu 1 view looking North to North Pit location on the rising ground in the foreground

Volt’s Environmental and Social Impact Study submission was prepared in accordance with the
requirements of relevant Tanzanian legislation, including the Environmental Management Act 2004; the Environmental Impact Assessment and Audit Regulations 2005 as well as the Mineral Sector Environmental Impact Assessment Guidelines 2014.

The requirements and procedures required to obtain mineral rights are stipulated in the Mining Act 2010 with 2017 amendments and the associated Mining Regulations 2018.

Volt’s Chairman, Asimwe Kabunga, commented,

“This is a significant milestone in the development of our Bunyu Project, as it transitions the Company a step closer to receiving the all-important Bunyu Mining Licences.

“Volt would like to take this opportunity to thank the local communities and government parties within the Lindi and Mtwara regions, along with the National Environmental Management Council, our Tanzanian specialist consultants Tansheq Limited and their sub-consultants, and our staff for their support, commitment, tenacity and diligence throughout this important process.”

“Looking ahead we remain firmly focused on advancing the Bunyu Project towards Stage 1 production, and we look forward to providing our shareholders with further updates on funding and development progress in the near-term.”

 

For and on behalf of Volt Resources Limited

Trevor Matthews
Chief Executive Officer


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UPDATED TANZANIAN PROSPECTUS LODGED & CO-OP AGREEMENT SIGNED

UPDATED TANZANIAN PROSPECTUS LODGED & CO-OP AGREEMENT SIGNED

Tanzanian-focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to provide the below update following the lodgement of an amended prospectus pursuant to the Company’s proposed US$40 million Note Issue and the signing of a strategic cooperation agreement with a major Chinese graphite company.

Amended Tanzanian Note Issue Prospectus Lodged

Volt advises that the amended prospectus for the US$40 million Note Issue was lodged with the Tanzanian Capital Markets and Securities Authority (“CMSA”) and the Dar es Salaam Stock Exchange (“DSE”) on Friday, August 17.

This followed correspondence from Volt and a meeting with the CMSA in late June after receipt of the CMSA’s initial review of the Note prospectus. The prospectus was also updated to include the recently published Stage 1 Feasibility Study results (see ASX release dated 31 July 2018) and the recent binding offtake agreement signed with Qingdao Tianshengda Graphite (see ASX release dated 2 August 2018).

Volt’s management would like to advise that as this is the first resources-based Note to be listed on the DSE, the Regulators have duly spent time understanding the differences from existing issuances which comprise banks and telecom companies. Volt and its advisors are pleased with the discussions and progress to date and remain confident of a successful outcome in respect to the proposed development funding.

Offtake Cooperation Agreement Signed

As previously reported (see ASX release dated 30 June 2018), Volt’s management has been participating in discussions and negotiations with a number of Chinese groups in regards to securing additional binding offtake agreements for the Company’s Bunyu Graphite Project.

As a result of these ongoing discussions, Volt is pleased to announce that its 100%-owned subsidiary – Volt Graphite Tanzania (“VGT”) – has signed a cooperation agreement with one of China’s largest graphite companies, HAIDA Graphite.

Under the agreement, VGT and HAIDA will exchange relevant information and conduct testing on VGT’s graphite product samples, as both parties look to build a working relationship for the future supply and purchase of Bunyu graphite product.

HAIDA has extensive mining, processing and sales experience, producing and supplying a range of graphite products to customers in China and international markets including Japan, Korea, the US and Western Europe.

Further discussions with other potential offtake partners are also advancing well and the Company looks forward to providing further updates on offtake agreements in due course.

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

“I am pleased to report that our amended prospectus has now been lodged with the relevant authorities in Tanzania, and we are now moving closer towards the issuance of the prospectus to sophisticated investment groups in key East African financial markets.

“Whilst in the early stages, our cooperation agreement with HAIDA serves as a precursor to the signing of a potential offtake agreement in due course, and we are very pleased to be working with another of the major graphite players in China.

“It is clear that Volt is continuing to receive very positive feedback from a number of parties regarding demand for Bunyu’s coarse flake graphite product which holds us in very good standing as we target the start-up of Stage 1 production and subsequent large-scale Stage 2 expansion.”

For and on behalf of Volt Resources Limited

Trevor Matthews
Chief Executive Officer

 


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Trevor Matthews – Chief Executive Officer
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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

 


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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
RESIGNATION OF NON-EXECUTIVE DIRECTOR

RESIGNATION OF NON-EXECUTIVE DIRECTOR

Matthew BullTanzanian focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) wishes to advise that Mr Matthew Bull has tendered his resignation as Non-Executive Director of the Company, effective immediately.

Matt has expressed his ongoing support for the Company and towards the future development of Volt’s world-class Bunyu Graphite Project in Tanzania.

Mr Asimwe Kabunga, Volt’s Chairman commented, “I would like to take this opportunity to thank Matt for his hard work and commitment in building and growing Volt Resources into what it is today. On behalf of the Board and the Management of Volt Resources I would like to wish Matt all the very best in his future endeavours.”

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