Company News

QUARTERLY ACTIVITIES REPORT TO 31 DECEMBER 2018

QUARTERLY ACTIVITIES REPORT TO 31 DECEMBER 2018

Highlights:

  • Mining Licences covering Stage 1 and 2 developments at Bunyu granted – all key approvals and licences now in place in preparation for commence of Stage 1 development work program
  • Tanzanian roadshow and North American investor meetings completed during the quarter
  • A$1.3 million secured via short-term funding facility to provide additional funding flexibility whilst Stage 1 development funding is completed

Tanzanian-focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or, the “Company”) is pleased to provide its quarterly activities report for the period ended 31 December 2018.


Receipt of Bunyu Mining Licences

In October, Volt received two Mining Licences (“ML’s”) ML 591/2018 and ML 592/2018 from the Mining Commission of the Ministry of Minerals of Tanzania, that cover the respective Stage 1 and Stage 2 development footprints at Bunyu. Importantly, Volt has now received all key approvals for the Stage 1 and Stage 2 developments of the Bunyu Graphite Project.

The ML’s cover a combined area of 17.71km2 and provide Volt with the exclusive right to develop the graphite resources within 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.

Stage 1 Development Funding

As previously advised, Volt has engaged Exotix Capital as funding advisor 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).

The Note Offer is by Volt’s wholly-owned subsidiary Volt Graphite Tanzania plc (“VGT”) through the issue of a Prospectus to potential investors in East Africa. The Notes are to be listed on the Dar es Salaam Stock Exchange (DSE) which required the approval of the DSE.

On 13 December 2018, VGT received approval from the Dar es Salaam Stock Exchange PLC to list its Notes on the Dar es Salaam Stock Exchange (“DSE”).

In addition, the issue of the Note Prospectus to investors requires the approval of Tanzania’s corporate regulator the Capital Markets and Securities Authority (CMSA). Post the quarter end, VGT received correspondence from the CMSA on Friday 25 January 2019 which set unrealistic commercial terms for the Note Issue to proceed. Volt will continue to discuss the Note Issue with the CMSA in the short term, to ensure an appropriate commercial balance is reached.

In parallel, Volt will continue to advance alternative funding options including, but not limited to a Note Issue and Listing on the Stock Exchange of Mauritius (“SEM”) that is using principally the same Tanzanian Note Prospectus, and US based institutional funds participation in the Stage 1 development funding.

Funds raised will be deployed towards the Stage 1 development of the Bunyu Graphite Project. A Definitive Feasibility Study (“DFS”) on the large-scale Stage 2 Expansion at Bunyu will also be undertaken concurrently with the Stage 1 development.

Roadshow and Investor Meeting Activity

During the quarter, Volt completed investor meetings in North America and an investor roadshow in East Africa. The Company is pleased to advise that strong interest was received from a number of investment funds and banks. Volt and Exotix Capital are continuing to actively progress a number of discussions in relation to the Stage 1 development funding requirements through 2019-2020.

A$1.3 Million Funding Facility Secured

Post-quarter end, the Company secured a short-term (6-month) funding facility of A$1.3 million, providing added funded flexibility over the coming months while the Company completes its development funding activities. The funding facility will not be dilutionary to existing shareholders as no equity will be issued during the 6-month loan period.

Research and Development Claim

During the quarter Volt lodged its income tax return and supporting R&D Tax incentive claim for the 2018 financial year, whereby the Company receives a 43.5% cash rebate on eligible R&D expenditure. This resulted in an R&D cash refund from the Australian taxation office of $641,173 in late December 2018, following which the Company repaid the $512,000 R&D loan received from the R&D Loan funder Radium Capital earlier in the quarter.

Project Development

In preparation for the planned development of Stage 1, four high quality responses were received from well credentialled and experienced engineering consultancies for the role of Project Management Consultant (PMC).

The four proposals were evaluated and post quarter end, a short list of proponents was interviewed to enable an appointment of the preferred engineering consultant in the new year. The selected PMC will manage the implementation of the Stage 1 development of the Bunyu Project in conjunction with Volt Graphite Tanzania.

Management Commentary

Volt Resources CEO Trevor Matthews commented:

“Our immediate priority remains on successfully completing our Stage 1 development funding process to enable the commencement of the Stage 1 development program. The interim bridge funding facility secured in January has provided added flexibility whilst the funding process is finalised.

“We look forward to providing further updates on the development funding process and the commencement of development work throughout this quarter.”

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
BUNYU DEVELOPMENT FUNDING UPDATE

BUNYU DEVELOPMENT FUNDING UPDATE

Tanzanian-focused flake graphite developer Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) provides the following update on its Bunyu Project development funding activities.

Volt announced to ASX on 14 December 2017 that it is seeking to raise US$40 million by way of the issue of Tanzanian Bonds or Loan Notes (‘Notes’) to fund the development of Stage 1 of the Bunyu Graphite Project. The Note Offer is by Volt’s wholly-owned subsidiary Volt Graphite Tanzania plc (“VGT”) through the issue of a Prospectus to potential investors in East Africa.

The issue of the Prospectus to investors requires the approval of Tanzania’s corporate regulator the Capital Markets and Securities Authority (CMSA). In addition, the Notes are to be listed on the Dar es Salaam Stock Exchange (DSE) which required the approval of the DSE. The DSE approval was received and announced to the market on 13 December 2018.

The Company has been engaged in ongoing discussions and exchange of correspondence with the CMSA. Correspondence received from the CMSA on Friday 25 January 2019 unfortunately set unrealistic commercial terms for the Note Issue to proceed. Volt will therefore continue to discuss the Note Issue with the CMSA in the short term, to ensure an appropriate commercial balance is reached.

In parallel, Volt will continue to advance alternative funding options including, but not limited to a Note Issue and Listing on the Stock Exchange of Mauritius (“SEM”) using principally the same Tanzanian Note Prospectus, and US based institutional funds participation in the Stage 1 development funding.

Further information on the funding options progress will be announced to the market at the appropriate time.

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

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SHORT TERM FUNDING ADDITIONAL INFORMATION

SHORT TERM FUNDING ADDITIONAL INFORMATION

Tanzanian-focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) provides further information regarding the short-term (6-month) loan facility announced on 22 January 2019 (see ASX announcement titled “Short Term Funding and Appendix 3Y” dated 22 January 2019).

Key terms of the loan are as follows:

Lenders RiverFort Global Capital Limited and Yorkville Advisors Global, LP
Borrower
Volt Resources Ltd
Loan Face Value and Drawn Amount The Face Value of the loan or amount repayable by Volt on maturity is A$1,500,000. The amount drawn by Volt under the Facility is $1,339,286.
Interest No interest is payable under the facility.
Maturity 6 months from drawdown.
Loan Term 6 Months with the option of a 6 month extension at the Company’s election.
Convertibility This a debt instrument and there is no equity conversion option during the 6 month loan period
Security A charge over Volt Australia Ltd’s assets which are minor in Australia. The charge includes its shareholding in its 100% owned Tanzanian subsidiary Volt Graphite Tanzania plc. The security does not extend to the Tanzanian assets held by Volt Graphite Tanzania plc. A charge over Mr Asimwe Kabunga’s shareholding in Volt Resources Ltd (see Appendix 3Y lodged with ASX on 22 January 2019).

The loan was taken out in the ordinary course of business and is not considered material with regards to the Company’s current plans and activities. As disclosed in the “Response to ASX Share Price and Volume Query” announcement dated 21 January 2019, recent share price and volume movements are considered to be related to the Company’s Stage 1 Bunyu Graphite Project development progress and the status of fund raising activities in Tanzania.

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
SHORT TERM FUNDING AND APPENDIX 3Y

SHORT TERM FUNDING AND APPENDIX 3Y

Tanzanian-focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to advise that it has secured a short-term (6-month) loan facility with a further 6-month extension option providing Volt with A$1.3 million.

Importantly, the loan facility will provide added flexibility over the coming months whilst the Company progresses listing approval from the Tanzanian Capital Markets and Securities Authority (“CMSA”) for the issue of the Note prospectus. The loan facility will not be dilutionary to existing shareholders as no equity will be issued during the initial 6-month loan period.

The loan is secured via a charge over Volt Resources assets and Mr Asimwe Kabunga’s shareholding in Volt. There is no security provided over the Tanzanian assets due to the need to keep them unsecured for the Bunyu project development funding.

Attached is an Appendix 3Y regarding the share security provided by the Volt Chairman, Mr Asimwe Kabunga. It is important to note there is no change in Mr Kabunga’s shareholding in Volt.

Volt Non-executive Directors Mr Stephen Hunt and Mr Alwyn Vorster expressed their appreciation of Mr Kabunga’s assistance in securing the loan funds.

Appendix 3Y

Short Term Funding Additional Information

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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DSE LISTING APPROVAL FOR VOLT’S TANZANIA NOTE ISSUE

DSE LISTING APPROVAL FOR VOLT’S TANZANIA NOTE ISSUE

Tanzanian-focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to advise that it has received the final formal approval from the Dar es Salaam Stock Exchange PLC to list its Tanzanian Note Issue on the Dar es Salaam Stock Exchange (“DSE”).

This approval completes a key phase of the funding process, and Volt’s management remains confident of receiving final approval from the Tanzanian Capital Markets and Securities Authority (“CMSA”) to proceed with the Note Offer in the near-term.

As previously advised, funds raised will be deployed towards the Stage 1 development of the Bunyu Graphite Project. A Definitive Feasibility Study (“DFS”) on the large-scale Stage 2 Expansion at Bunyu will also be undertaken concurrently with the Stage 1 development.

Volt has already received key development approvals covering the respective Stage 1 and Stage 2 developments of the Bunyu Graphite Project (see ASX release dated 22nd October 2018).

Volt looks forward to providing further updates on the CMSA approval process in due course.

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

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TANZANIAN NOTE ISSUE UPDATE

TANZANIAN NOTE ISSUE UPDATE

Tanzanian-focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to advise that it continues to advance its Tanzanian Note Issue, with conditional approval received from the Dar es Salaam Stock Exchange PLC to list the Notes on the Dar es Salaam Stock Exchange (“DSE”).

While most of the conditions relate to the provision of further information or points of clarification, the key condition is the approval of the Note prospectus by the Tanzanian Capital Markets and Securities Authority (“CMSA”). While this approval is yet to be obtained, Volt is confident of receiving the approval in the near
future.

The conditional approval represents an important progression in the funding process, with Volt
management and its advisors, Exotix Capital and Orbit Securities commencing an investor roadshow in Tanzania this week in advance of receiving the prospectus approval from the CMSA.

This latest development follows the issue by the Mining Commission of the Ministry of Minerals of Tanzania of two mining licence’s, ML591/2018 and ML592/2018, covering the respective Stage 1 and Stage 2 developments of the Bunyu Graphite Project (see ASX release dated 22 October 2018).

As previously advised, funds raised will be deployed towards the Stage 1 development of the Bunyu Graphite Project. A Definitive Feasibility Study (“DFS”) on the large-scale Stage 2 Expansion at Bunyu will also be undertaken concurrently with the Stage 1 development.

Volt looks forward to providing further updates on the Tanzanian funding process shortly.

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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INVESTOR PRESENTATION – NOVEMBER 2018

INVESTOR PRESENTATION – NOVEMBER 2018

Investor Presentation (PDF)

 

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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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

 


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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

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