Highlights:
- The Mauritian Funding Process Commenced
- Excellent Initial Testwork Results Highlight Significant Potential to Improve Bunyu Graphite Economics
- Rights Issue Funding Completed
Tanzanian-focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or, the “Company”) is pleased to report on the Company’s activities for the quarter ended 31 March 2020.
March Quarter Activities Overview
Bunyu Stage 1 Development Funding Update
Volt’s 100%-owned subsidiary, Volt Graphite Tanzania Plc (VGT), is progressing with the raising of US$15,000,000 through the issue of Senior Notes – with a greenshoe option of up to US$15,000,000 – to raise up to US$30,000,000 by way of private placing on the Development and Enterprise Market (DEM) of the Stock Exchange of Mauritius (SEM).
The Company and its advisor, Alphier Capital (formerly Exotix Capital) along with local brokers, commenced investor meetings from 27 January 2020 as part of a roadshow to market the Notes to sophisticated investors.
The Mauritian Note offer has been extended and is planned to close 30 June 2020. The first day of trading of the Notes on the Stock Exchange of Mauritius DEM is scheduled for Monday, 6 July 2020.
Due to the recent and widespread impact of the COVID-19 pandemic on financial markets and the associated delays as institutions and investment groups change their work arrangements leading to delays in conducting due diligence and the deferral of investment decisions, the Company is providing potential investors with additional time to complete these processes.
A number of alternative funding proposals were presented to the Company as result of the engagement with numerous investment groups as part of the Note offer marketing process and these are currently being progressed in parallel with the Note Offer process.
The purpose of progressing with the Mauritian Note offer and alternative funding proposals is to enable the Company to:
(a) commence the development of the Stage 1 Bunyu Graphite Project in Southern Tanzania including the construction of a 400,000tpa concentration plant and associated infrastructure; and
(b) fund the resettlement costs of people currently farming and/or living within the project development area.
Excellent Testwork Results
During the March quarter the Company commenced the first stage of a testwork program on graphite ore from the Bunyu Graphite Project in Tanzania. The testwork program was undertaken by highly respected technical group, American Energy Technologies Co. (“AETC”) which is headquartered and operates research and laboratory facilities in Chicago, Illinois.
AETC testwork program summary
In January 2020, Volt commissioned AETC to undertake a testwork program using a representative sample from drilling completed as part of the Stage 1 Feasibility Study at the Company’s Bunyu Graphite Project.
A graphite product from the Bunyu ore sample was prepared and analysed for certain physical, chemical and processing properties to provide information for its suitability for several value-added graphite market applications including as anode feedstock for Li-ion battery cells.
The representative sample of ore was obtained from a composite sample produced from a metallurgical drilling program undertaken as part of the Stage 1 Feasibility Study (FS).
For further information regarding the drilling program and composite sample refer to the ASX announcement Excellent Bunyu Testwork Results – Additional Information dated 20 April 2020.
In the testwork conducted, concentrate grade recovery and flake preservation had an emphasis on the use of a heavy molecular oil method (AETC’s frother is referred to as AMO). This method offers an alternative to the industry standard reagent, kerosene.
The success of this method is based on a synergistic use of high shear mixing and AMO. By the end of the primary beneficiation process, aa 86.6 wt. % TGC concentrate was produced with recovery of at least 68.5 wt. % of graphite available for beneficiation.
This is an effective method to produce flake graphite concentration for the purpose of subsequent down-stream processing and characterisation for a range of applications.
Producers that use the industry standard method, which includes kerosene as an additive and utilizes large paddles as an agitator of material, typically require at least a few more polishing grinds, the application of an attrition mill, and a greater number of cleaner circuits to achieve a similar result, and this would be more complex in a laboratory application where the focus was to produce flake graphite cost effectively for subsequent downstream processing testwork.
The testwork undertaken included both physical and chemical characterisation, and Industry standard analytical techniques have been employed.
The recovery of 68.5 wt.% of the total available concentrate was deemed appropriate by the consulting laboratory, extracting what they believe was a fully representative sample of flake graphite product sample for thermal purification by the induction furnace into the secondary processed grade.
Below is a table with the Stage 1 product size distribution compared with the product distribution from the AETC graphite product from the aforementioned testwork program.
There is a substantial increase in the percentage of high priced +30# and +50# graphite flake with a consequent reduction mainly in the lower priced fine graphite flake. With further testwork and analysis, this could have major economic benefits for both the Stage 1 and Stage 2 Bunyu project.
If through further testwork the benefits in flake size distribution continue, the next step would be to consider the incorporation into the Stage 1 feasibility study and flowsheet design. The operating and capital
cost changes to the current Stage 1 plant are expected to be minimal and more than offset by the substantial increase in sales revenue.
The above results are from the first phase of the AETC program and the Company looks forward to releasing further results as they become available.
The testwork program constituted the main mining exploration activity undertaken by the Company during the March quarter. Total expenditure on exploration activities for the quarter was $384k.
There was no mining production and development activities undertaken in the March quarter.
Non-Renounceable Rights Issue Funding Completed
The Company successfully raised the target amount of $1.251 million following the underwriting and placement of all shortfall shares from the Rights Issue (see ASX Announcement dated 17 December 2019).
The Company received a further $638,055 from the issue of 63,805,449 shares following the underwriting and placement of the shortfall shares in January 2020.
Funds raised were used to progress the DEM listed Note issue, discussions with other development funding sources and for general corporate and working capital.
Mining Tenements
The schedule of interest in mining tenements as at 31 March 2020 follows.
All tenement within Tanzania are held by Volt Graphite Tanzania Plc, a wholly owned subsidiary of Volt Resources Ltd.
The Company did not acquire or dispose of any tenements during the quarter. The Company is not a party to any farm-in or farm-out agreements.
Cash Position and Mid-Term Funding
The Company finished the 31 March 2020 quarter with $27k in cash and $46k in receivables.
While the Company progresses its fund raising activities for the Stage 1 development, it is currently advancing with proposals to raise a smaller amount of funds for corporate and working capital purposes.
Early in the March quarter the Company reduced its Perth staff to the CEO role with most activities being outsourced and a number of other corporate services ceased to further reduce expenditure. Reductions in Tanzania personnel were also undertaken during the quarter.
Related Party Payments
During the quarter $5,000 was paid in respect of Non-Executive Directors fees.
Management Commentary
Volt Resources CEO Trevor Matthews said:
“The focus in the March quarter moved to the formal start of the Company’s development funding initiatives with the Mauritian Note offer commencing combined with a marketing roadshow. This in turn led a number of introductions to alternative funding providers with which discussions continue.
“Our Stage 1 funding initiatives continue to advance, even in light of the current COVID-19 pandemic which is causing delays in the process, and I look forward to providing updates on our Mauritian Note Offer and other funding sources in due course.”
This announcement was authorised for release by the Board of Volt Resources Ltd.
FOR PERSONAL USE ONLY
For further information please contact:
Trevor Matthews – Chief Executive Officer
Tel: +61 8 9486 7788