Volt Resources surges 18pc on $39m Tanzanian fund raising
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Tanzanian-focused graphite play Volt Resources plans to raise $US30 million ($39 million) to fund a massive graphite project.
The news pushed Volt shares up 18 per cent to 2.7c in Wednesday trade.
Volt (ASX:VRC) appointed investment bank Exotix Capital to manage the fund-raising. The firm will focus on the Tanzanian, Kenyan and Ugandan capital markets to complete the proposed issue.
The funds will go towards early development of Volt’s flagship Bunyu graphite project in Tanzania.
The project’s first stage will target production of 20,000 tonnes of annual graphite production by late 2018.
“Exotix brings to the table an extensive network of East African investors and a comprehensive strategy to access these local parties who have a strong appetite for large-scale resource projects such as Bunyu,” Volt’s chairman Asimwe Kabunga told investors.
The proposed bond financing would allow funding with minimal equity dilution.
Once the raising was complete, Volt would have bonds listed on the Dar es Salaam Stock Exchange (DSE) in Tanzania. This process would take up to a year to complete.
Volt is also in talks regarding other funding proposals for stage one development at Bunyu.
Bunyu is the largest JORC mineral resource of graphite in Tanzania of 461 million tonnes at 4.9 per cent total graphite carbon and can produce graphite suitable for battery production and building material uses.
JORC compliance refers to the mining industry’s code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.
Tanzania has been in the news following amendments to its Mining Act including potential renegotiation of agreements, a required 16 per cent government ownership of mining projects and the right to acquire up to 50 per cent of mining companies under certain conditions.
Volt has a market cap of $25 million.