Volt Resources launches Non-Renounceable Rights Issue to Raise up to $ 1.25 million

Australia-based flake Graphite explorer and developer, Volt Resources Ltd (ASX: VRC), currently advancing its flagship asset, the Bunyu Graphite Project (100%-owned), located in south-east Tanzania, announced to the market, on 19 November 2019, that the company would be undertaking a 1 for 12.9 Non-Renounceable Rights Issue of ordinary shares to raise up to $ 1.250 million (before costs).

Under the Rights Issue, eligible Shareholders would be entitled to apply for 1 new ordinary fully paid share for every 12.9 ordinary shares held as at 5.00pm (AEDT) Monday 25 November 2019, which is the Record Date.

The offer price of $ 0.01 (1.0 cent) represents-

  • a 23% discount to the last closing price of Volt Resources’ shares on 18 November 2019, and
  • a 24.5% discount to 5-day VWAP price up until that date.

Volt Resources’ Chairman Mr Asimwe Kabunga, via Kabunga Holdings Pty Ltd, agreed to underwrite up to $ 600,000 of any shortfall from the Rights Issue. The new ordinary shares that are not taken up by eligible Shareholders would be available under a Shortfall facility (Oversubscriptions Facility).

Besides, the Eligible Shareholders who subscribe for their entitlement in full may apply for additional new ordinary shares under the Oversubscriptions Facility. The Directors of the Company that are eligible also expressed their intent to participate in the Rights Issue.

Indicative Rights Issue Timetable

Note: Subject to the Corporations Act and Listing Rules, the Company reserves the right to vary the timetable without prior notice, including by extending the Closing Date, closing the Rights Issue early, accepting late Applications or by withdrawing the Rights Issue. The Company also reserves the right not to proceed with the whole or part of the Rights Issue at any time prior to allotment. In that event, Application Money will be returned without interest.

The funds raised from the Rights Issue have been indicated to be directed towards progressing with the approvals process of the respective Dar es Salaam (DSE) and the Stock Exchange of Mauritius (SEM) listed note issues, to meet the current payable obligations and for general corporate and working capital purposes. In addition, Volt Resources would also be reviewing its Australian based structure and activities to cut back expenditure, particularly whilst the Stage 1 Bunyu Project development funding activities are in progress.

While the Rights Issue is completed, the company has secured $ 100,000 in short term working capital funding from the Chairman and the CEO ($ 50,000 from each of Mr Kabunga and Mr Matthews) on an unsecured, arm’s length commercial terms basis to meet its working capital requirement. The amount is repayable on or before 31 December 2019.

The Bunyu Project – Overview

The Bunyu Project has critical infrastructure in the vicinity like sealed roads network and ready access to the port of Mtwara (deep-water) that is only 140 km away. It is being established in 2 stages with the stage 1 aimed at establishing the vital infrastructure and assessing the market inclination for Bunyu graphite products, that would pave the way for the much bigger Stage 2 expansion project.

Sources: Bunyu Project 

Volt Resources’ current focus remains to procure the required USD 40 million funding for Stage 1 as the company transitions from the ongoing phase of project studies and funding to project development and production at Bunyu.

Read more: VRC’s September 2019 Quarter Highlights

Stock Performance: VRC has a market capitalisation of approximately $ 19.26 million and it has around 1.61 billion outstanding shares. On 20 November 2019, the VRC stock closed the day’s trade at a  price of $ 0.012.


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