Volt Resources Limited (ASX: VRC), an Australia-based mineral exploration company, that is exploring and developing its flagship Bunyu Graphite Project (wholly-owned) located in southern Tanzania with an ideal location near to critical infrastructure such as closeness to deep water port of Mtwara and a network of sealed roads running through the project.
Key Highlights – Half Year Ended 30 December 2019
The Company has primarily been focussed on advancing the Stage 1 development funding for the Bunyu Graphite Project during the reporting period.
Note Issue Developments: During the half year, the Company and its financial advisors Alphier Capital, formerly Exotix Capital, achieved major progress on the Stock Exchange of Mauritius (SEM) Note Issue and listing, which forms an important part of the Company’s funding strategy to raise the targeted funding of USD 40,000,000 for Bunyu Project Stage 1 development.
Volt Graphite Tanzania Plc (VGT), which is a fully-owned Tanzanian subsidiary of Volt Resources, is currently advancing a private placement of Notes to be listed on the Development and Enterprise Market (DEM) of the SEM and seek to raise USD 15 million via issue of Senior Notes, with a greenshoe option of up to USD 15 million, to finally raise up to USD 30 million. The application submitted by VGT for Note Issue received approval in December 2019 from SEM’s listing executive committee.
Subsequently, a Note Issue roadshow around the end of the reporting period was conducted by the Company and its advisors.
At the same time, Volt Resources has been engaging in discussions with government officials regarding another proposed Tanzanian Note issue and listing on the Dar es Salaam Stock Exchange by VGT. However, this process has been suspended as of now.
Furthermore, Volt Resources and Alphier Capital are also engaging in discussions over funding and project due diligence with North American, Middle East and African-based institutions.
Offtake Agreement Extended : Also, in December 2019, VGT and Qingdao Tianshengda Graphite Co. Ltd signed an amendment, to the binding sales agreement previously executed on 1 August 2018 for the supply of 9,000 tonnes per annum of Bunyu Graphite Product over five years, extending the milestone dates by a further 2 years.
This demonstrates strong support and confidence that Volt Resources’ offtake partner Tianshengda has in the Company’s vision and operations. This further gives testimony to the quality of Volt’s graphite products as well as indicates the anticipated increase in flake graphite demand over the coming years, particularly from Electric Vehicle industry and grid energy storage applications, manufacturing of flame retardant building materials as well as other potential industrial uses.
However, the offtake Agreement is conditional to construction and commissioning of Stage 1 for mine development, as well as complete construction of the processing plant to treat enough ore within prescribed milestone dates (which expired in the March 2020 quarter).
In fact, another Offtake Agreement draft that would be executed upon receiving development funding. Volt Resources also concluded that the combined offtake quantities under the current and potential offtake agreements is up to forecasted production under Stage 1 development.
Community Relations Overview: VGT has continued to maintain and strengthen relationships with the local communities even while project development activities have been deferred. Some of the key community initiatives during the reporting period include maintenance of strong communication through updated reports, Resettlement Working Group meetings and meetings with the district government, ward and village leaders.
Additionally, VGT has also continued to contribute financial aid under its social investment program which includes monthly allowance for the Nursery School teachers at Utimbula village and financial contributions for a new ward office and school classroom facilities.
- July 2019: A Share Purchase Plan (SPP) closed oversubscribed in August 2019 raising AUD 1.299 million in total. A top-up placement of new shares to sophisticated and professional investors raised AUD 250,000 and a further $ 100,000 approved by shareholders at the 2019 Annual General Meeting, took the total funds raised to $ 1.649 million. The fund usage included repayment of the outstanding loan notes due to Riverfort Global Capital and Yorkville Advisors, for general working capital as well as for corporate activities.
- December 2019: A 1:12.9 non-renounceable Rights Issue was executed and raised $ 1.251 million upon underwriting and placement of all shortfall shares while the funds were indicated to be directed for taking forward the DEM listed Note issue, negotiations with potential funding institutions, general corporate as well as working capital activities.
- 8 January 2020: Volt announced receipt of $ 638,055 from the issue of 63,805,449 shares following the underwriting and placement of the shortfall shares with funds to be used for SEM listing of Notes, advance the process of obtaining approvals for DSE Note Issue as for general corporate and working capital purposes.
Also, on 27 January 2020, the Mauritian funding process finally commenced with the Company’s Note Offer officially opening on this day and planned to close on 24 April 2020. The first day of trading of the Notes on the Stock Exchange of Mauritius’ DEM is scheduled for 30 April 2020 with a roadshow to market the Notes to sophisticated investors ongoing since the opening of the Issue.
The Company recently informed the market that despite the COVID-19 disruptions, Stage 1 funding initiatives continue to advance and further updates would be provided in due course.
Stock Information: The VRC stock is currently priced at AUD 0.006 and last traded on 8 April 2020. VRC has delivered a return of 20% over the last five days.