2018 should be a pivotal year in the history of Volt Resources history, potentially seeing it migrate from graphite developer to graphite producer.
However, a number of milestones remain, including off-take agreements on commercial terms, mining licence approval and of course the financing of Bunyu Phase 1.
With Bunyu Phase 1 intended to be largely debt funded via a Tanzanian bond issue and short term equity funding completed for current work programmes, Volt Resources sees a lower risk of future dilution until Bunyu enters production.
Volt Resources has appointed the Africa-centric financial advisor, Exotix Capital, to arrange the sale in Tanzania of a US$40 m corporate bond.
While Exotix has exhibited credibility in the successful sale of a US$25 m bond related to Swala Oil & Gas, the company is unaware of Exotix’s expertise in financing mining projects.
For reference and as a guide to Volt Resources’ future bond interest rate charge, Tanzania’s 10-year bond rate is 15.89%.
In terms of Volt’s recent financing activity, it has diluted its share capital by 40% ytd, issuing 390.6 m new ordinary shares at a slight discount to the then prevailing share price, raising A$8.0 m.
This funding should easily meet spending requirements until such time as Volt notifies the market of its success in financing Bunyu.
To develop Bunyu on an expedited basis, Volt Resources has initiated work programmes tackling a broad swathe of critical path project elements.
All project milestones, aside from financing Phase 1, are now funded via the company’s recent equity issue and option exercise.
The main milestones remaining are:
- The completion of its fully funded revised Bunyu feasibility study. This will form the basis of its understanding on the costs of developing Bunyu in a phased manner. The first phase of development of a mine will allow for the mining and processing of c400,000 tpa of graphitic ore into c 20 ktpa of refined sale-able graphite products for use in both industrial and battery applications.
- To fund Phase 1, Volt has appointed Exotix Capital to complete preparations for a Tanzanian bond issue for US$40 m.
- Bunyu’s Environmental and Social Impact Statement was lodged with the National Environment Management Council and announced to market on 23 January 2018. This follows Volt’s completion of an Environmental and Social Impact Assessment study.
- Volt announced on 8 February that it has lodged its mining licence application with the relevant Tanzanian authorities. This application covers both Phase 1 and Phase 2 of the Bunyu graphite project.