Highlights:
- Stock Exchange of Mauritius approves Volt’s Note Listing on the Development and Enterprise Market
- Successful Non-Renounceable Rights Issue raises A$1.25 million
- Binding offtake agreement with Tianshengda extended by mutual agreement
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 December 31, 2019.
December Quarter Activities Overview
Bunyu Stage 1 Development Funding Update
During the quarter, the Company and its advisors Alphier Capital (“Alphier” and formerly Exotix Capital) made significant progress with respect to the Stock Exchange of Mauritius (“SEM”) Note Issue and listing, which is a key component of its funding strategy to raise US$40 million for the Stage 1 development of Bunyu Graphite Project.
As previously advised, Volt’s 100% owned Tanzanian subsidiary Volt Graphite Tanzania Plc (“VGT”) is undertaking a private placement of Notes that will be listed on the Development and Enterprise Market (“DEM”) of the SEM. The Note offer is seeking to raise 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.
In December, VGT’s application for the listing of Notes was approved by the Stock Exchange of Mauritius listing executive committee.
With the approval finalised, at quarter end the Company and its advisors commenced planning for VGT’s Note Issue roadshow. Subsequent to the quarter end, the Note Offer opened on 27 January 2020 with Volt’s CEO, Trevor Matthews, and Alphier Capital Managing Partner, Andrew Moorfield, commencing the Note Offer roadshow investor meetings.
The Mauritian Note offer is planned to close 20 February 2020. The first day of trading of the Notes on the Stock Exchange of Mauritius DEM is scheduled for Wednesday, 26 February 2020.
While the DEM Note Offer is currently the Stage 1 development funding priority, during the quarter the Company continued to progress discussions with government officials regarding VGT’s proposed Tanzanian Note issue and listing on the Dar es Salaam Stock Exchange. Further, other development funding discussions and project due diligence processes continue with North America, Middle East and African based institutions via Alphier Capital.
Non-Renounceable Rights Issue Raises A$1.25m
During the quarter, the Company undertook a 1 for 12.9 non-renounceable Rights Issue (Rights Issue) of ordinary shares, which closed in December, raising A$1.251 million following the underwriting and placement of all shortfall shares (see ASX Announcement dated 17 December 2019). Subsequent to the reporting date, (see ASX Announcement dated 7 January 2020), Volt received a further $638,055 from the issue of 63,805,449 shares following the underwriting and placement of the shortfall shares. Volt’s Chairman, Asimwe Kabunga, strongly supported the capital raising, contributing in excess of $0.5 million of the total amount raised. Funds raised will be used to progress the DEM listed Note issue, discussions with other development funding sources and for general corporate and working capital.
Binding Offtake Agreement Extended
The binding sales agreement (“Agreement”) between VGT and Qingdao Tianshengda Graphite Co. Ltd. (“Tianshengda”) for 9,000 tonnes per annum of Bunyu Graphite Product over five years was executed on 1 August 2018.
The Agreement is conditional upon 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 within defined milestone dates. The milestone dates were due to expire in the coming quarter.
The Company and Tianshengda recently executed an amendment to the Agreement extending these milestone dates by a further 2 years. This is a strong show of support and confidence by our offtake partner, Tianshengda, and reflects not only the quality of Volt’s graphite products but the expected strong increase in flake graphite demand in coming years from EV and grid energy storage, flame retardant building materials and other new industrial applications.
The Tianshangda Offtake Agreement is one of two binding offtake agreements entered into by VGT and there is a further offtake agreement in draft that is to be executed once development funding is obtained. The combined offtake quantities under the existing and planned offtake agreements has completed the sale of product forecast to be available from Stage 1 production.
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.
Cash Position and Mid-Term Funding
The Company finished the 31 December 2019 quarter with $120k in cash and subsequent to the quarter end received a further $638,055. While the Company progresses its Mauritian Note Issue to raise funds for the Stage 1 development, the Company is reviewing proposals to raise a smaller amount of funds for corporate and working capital purposes following the completion of its Mauritian Note Issue and other development funding discussions.
Management Commentary
Volt Resources CEO Trevor Matthews said:
“The overarching focus this quarter was advancing the Company’s development funding initiatives, and the approval from the Stock Exchange of Mauritius represents a significant step towards securing Stage 1 funding.
“With VGT’s application for the listing of Notes approved and the Note offer open, the Company and its advisors are now proceeding with VGT’s Note Issue roadshow.
“Furthermore, the $1.25 million secured via the completed Rights Issue provides the Company with the funding required to progress the Companies development funding initiatives. “The milestones achieved this quarter have heightened the Company’s confidence that this funding process is nearing a conclusion, and we look forward to providing further updates in due course.”
This announcement is authorised for release by Volt’s Chief Executive Officer, Trevor Matthews.
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