Volt Resources Limited (ASX: VRC) is into metals and mining sector. The company is engaged in exploration activities as well. The company includes segments comprising Mineral Exploration-Tanzania and Mineral Exploration-Australia.
On 25 January 2019, the company provided response to the ASX Aware Query which was regarding the company’s earlier announcement entitled “Short Term Funding and Appendix 3Y”.
In the response, the company informed that it entered a non-binding term sheet with Riverfort Global Capital Ltd on 12 November 2018. It stated key terms for the provision of a short-term loan facility by Riverfort to the company. The provision of the short-term loan facility is subject to completion of satisfactory due diligence, approval by the Riverfort credit committee and execution of legally binding facility and security documentation.
Riverfort in due course introduced Yorkville Advisors, a second party to the proposed short-term financing arrangements. Riverfort and Yorkville each proposing to make available 50% of the proposed short-term funding. Drafting of the formal facility and security documentation started in December 2018, with the final documentation being agreed and executed on 14 January 2019. Volt received the short-term loan facility of $1,339,286 in funding on 15 January 2019.
The company does not consider the execution of the short-term loan facility to be a piece of material information, that is a reasonable person would expect to have a material effect on the price or value of the shares, or the information would influence investors in deciding whether to acquire or dispose of Volt securities. The company is of the opinion that its value is primarily related to its progress in developing the Bunyu graphite project in Tanzania.
The company has announced on 14 December 2017 that it is keen on raising a fund of US$40 million through an issue of Tanzanian Bonds or Loan Notes to fund the development of Stage 1 of the Bunyu Graphite Project. As stated by the company that the funds raising is significant for the company to be able to progress the development of Stage 1 of the Bunyu Graphite Project. Volt is currently waiting for the approval of the Tanzanian Capital Markets and Securities Authority (CMSA), as this will help Volt to proceed to issue the note prospectus. Hence, the company believes that the approval from CMSA is a significant achievement in this regard for the company, and this is likely to have a material impact on the price or the value of the shares of the company.
The loan amount of A$1.3 million drawn on 15 January 2019 under the short-term loan facility amounts to approximately 5.6% of Volt’s total equity as at 30 June 2018 of A$23.3 million per the company’s audited financial statements. The company and its auditors assess materiality regarding the balance sheet items as being greater than 10%, with 5% or less being immaterial. Also, the A$1.3 million advanced under the short-term loan facility represents just 3.9% of the company’s market capitalization of A$33.48 million as of 23 January 2019.
Let us quickly have a glance at the Volt Resources Limited’s stock performance and the return it has posted over the last few months. The stock last traded at a price of $0.024 with an increase of around 4.348% during the day’s trade. It generated a YTD return of approximately 20.0% and has a market capitalization of $33.48 million. The stock has a 52-week high price of $0.048 and a 52-week low of $0.017, with an average volume of 917,555 approximately.
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