Singapore-based PEY Capital is in an exclusivity period to arrange up to US$320m of funding to develop Magnis’ Nachu graphite project in Tanzania. Pic via Getty Images
Mining
Special Report: PEY Capital has entered an arrangement to source the complete US$320 million in funding needed to develop the Nachu graphite project in Tanzania.
PEY Capital, currently in an exclusivity period with Magnis Energy Technologies (ASX:MNS) until April 12, has engaged its related Tanzanian entity – the privately held Tantel ISAF Group – to assist with the financing process.
Tantel is one of the largest private investors in Tanzania with businesses in multiple industries, including pharmaceutical, aviation, agriculture, finance and technology.
The funding will see the full development of Nachu graphite project, situated about 220km from the Tanzanian port of Mtwara, as well as the production of 240,000tpa of graphite concentrate near Ruangwa in the country’s south-east.
To date, all major mining and environmental approvals have been received at Nachu, which stands as the only graphite project to be awarded a Special Economic Zone licence in Tanzania.
An updated bankable feasibility study (BFS) completed in September 2022 increased Nachu’s post-tax life of mine NPV to $1.8 billion and project IRR to 51% with a payback period of 19 months.
The 29.77km2 Nachu project boasts a 174Mt resource at 5.4% total graphitic carbon (TGC) for 9.3Mt contained graphite, making it one of the largest mineral resources of flake graphite in the world.
According to MNS, over 82% of the graphite concentrate produced from Nachu will be above 150 microns, which makes the product very coarse.
The graphite concentrate below 300 microns will be produced at 99%TGC, which is extremely high versus the current industry standard of 94-96%TGC, MNS chairman Frank Poullas says.
MNS plans to use the intrinsic high-quality, high-purity Nachu graphite concentrate as a feedstock to make battery-active anode material (AAM) for electric vehicle batteries.
Graphite remains as the most commonly used anode material due to its high electrical conductivity, low cost and stable structure.
In February 2023, MNS signed an agreement with EV giant Tesla to supply a minimum 17,500tpa of AAM beginning in February 2025 for a minimum term of three years.
“Our financing discussions with PEY and Tantel continue to progress in a positive manner,” Poullas says.
“In recent months, Magnis has been in discussions for the offtake of significant volumes of graphite concentrate and we will keep shareholders updated as these discussions progress.”
This article was developed in collaboration with Magnis Energy Technologies, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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