HomeBattery metalsVolt Resources terminates Zambian gold project acquisition

Volt Resources terminates Zambian gold project acquisition

African-focused gold and graphite explorer and developer Volt Resources will not be proceeding with the proposed acquisition of an 85% interest in the Luiri Hill gold project in Zambia.

The company will however continue to advance the exploration of its gold projects in Guinea and the funding for the development of the Stage 1 Bunyu graphite project in Tanzania.

Read more: Volt Resources begins exploration at Guinea gold projects

In May 2020, Volt entered into a binding term sheet regarding the conditional acquisition of an 85% interest in Luiri Hills. The proposed acquisition was subject to (amongst other things) satisfactory completion of Volt’s due diligence enquiries as well as the execution of a share sale agreement in a form acceptable to Volt. Despite prolonged discussions with the project vendors in regards to the proposed acquisition, Volt has not been satisfied with the results of its due diligence enquiries (including corporate issues associated with the project holding structure, issues associated with the project licences and community related issues).

Further, and subsequent to the execution of the binding term sheet, the project vendors requested Volt to commit to acquiring an additional 2.5% interest in Luiri Hills for significant additional consideration as a pre-condition to the proposed transaction proceeding, which was not acceptable to Volt and not considered to be in the best interests of Volt’s shareholders.

Accordingly, Volt will not proceed with the proposed acquisition of an interest in the project and has terminated discussions with the project’s vendors.

Guinea gold projects summary

Volt has six permits covering an area of 348.7 km2 in Guinea’s highly-prospective Siguiri Basin and has grouped them into three projects – the Kouroussa project, Mandiana project and Konsolon project.

Read more: Volt Resources to acquire gold project in Guinea

The Kouroussa project comprises three permits, the Kouroussa, Kouroussa West and Fadougou permits. The Kouroussa and Kouroussa West permits border the PDI permit which was the subject of a recently announced discovery of high-grade gold mineralisation. To the NE, the Kouroussa permit borders the Kouroussa mine and the Fadougou permit is located 13k m NE of the same mine.

The Konsolon project constitutes one prospective permit. The permit consists of several geochemical gold in soil anomalies identified by previous explorers.

The Mandiana project comprises the highly prospective Nzima permit and Monebo permit.

The Nzima permit borders the Nzima artisanal mine and is 15 km SW of the 1.1 Moz Tri-K deposit owned by Managem.

Bunyu graphite project update

Volt Resources remains focused on the development of its wholly-owned Bunyu graphite project in Tanzania. The Bunyu project is located near to critical infrastructure with sealed roads running through the project area and ready access to the deep-water port of Mtwara 140 km to the south east. Bunyu has the largest JORC graphite resource in Tanzania and one of the largest in the world. It also has the largest JORC Reserve in East Africa. This has been achieved with exploration conducted over only 6% of the total tenement area.

It is the project size and the expected significant increase in global demand for flake graphite that support the strategy to develop Bunyu into one of the largest graphite mines in the world.

As a strategy for de-risking the development of a full-scale Stage 2 project, Volt developed a two-stage approach to project development starting with a smaller scale Stage 1 start-up project. As well as establishing local relationships, project development and logistics paths, this will provide commercial quantities for product marketing, developing downstream processing options and will assist the negotiation of offtake contracts for the main Stage 2 development.

The company has continued with Stage 1 funding discussions despite the disruption experienced with the COVID-19 pandemic, changes in work arrangements and international travel restrictions.

The company’s 100% owned subsidiary Volt Graphite Tanzania (VGT) continues to maintain good relationships with the local communities even though project development activities are deferred while development funding is being progressed. VGT maintained strong communication through update reports, resettlement working group meetings and meetings with the district government, ward and village leaders.