Volt Resources Ltd (ASX:VRC) (FRA:R8L) has executed a full form loan agreement and associated security documents with European investment company JES Green Investments Limited for provision of a US$8.5 million loan facility to assist with funding Volt’s acquisition of a 70% interest in the Zavalievsky group (ZG) of companies.
The first tranche of US$4.million has been drawn providing the funds for Volt to proceed to completion of the acquisition and related expenses as well as to provide working capital.
This acquisition is anticipated to be completed in the week commencing June 7, 2021, with Volt managing director Trevor Matthews travelling to Ukraine to attend the ZG Group acquisition completion meeting.
ASX-listed graphite producer
The company considers this transaction as a logical and value accretive step and will instantly transition Volt from a graphite explorer and developer into a graphite producer.
Volt will become one of the few ASX-listed graphite producers without the usual time and risk related to complete greenfield project financing, construction, commissioning and ramp-up.
The Zavalievsky graphite business in Ukraine has the following advantages for Volt:
- Located in Eastern Europe in close proximity to key markets with significant developments in LIB facilities planned to service the European based car makers and renewable energy sector;
- Plans to produce battery anode material using existing graphite production to become a fully integrated supplier to LIB cell makers based in Europe;
- Makes graphite products across the range and has the potential to significantly increase its high-value large flake production;
- Produces a high value ‘green’ purified 99.5% TGC product;
- Long-life multi-decade producing mine that has further exploration upside;
- Existing customer base and graphite product supply chains which Volt expects to be able to leverage in developing its existing Bunyu graphite project in Tanzania;
- Excellent transport infrastructure covering road, rail, river and sea freight combined with reliable grid power, ample potable groundwater supply and good communications;
- An experienced workforce that can assist with training, commissioning and ramp-up for the Bunyu graphite project development;
- Potential to generate material cashflow which could make Volt internally funded for corporate costs and working capital into the future;
- Co-products of quarry stone for the domestic market and garnet for the European market that could generate material cash flow for relatively low capital; and
- A 79% interest in 636 hectares of freehold land, with the mine, processing plant and other buildings and facilities located on that land.
US$3.8 million first instalment
Volt is required to pay the first instalment of US$3.8 million to the ZG Group vendors on completion of the acquisition.
ZG Group vendors will provide signed share transfers whereby Volt will acquire the 70% interest and control of the Zavalievsky group of companies.
The final instalment of US$3.8 million is payable six months after completion of the transaction.
Second tranche available June 10
There is one change to the previously announced terms with the exercise price for the second tranche of 25 million options now agreed at $0.06 per Volt share.
Both tranches of 25 million options now have an exercise price of $0.06 per Volt share.
Further funding from a second tranche of US$4.0 million will be available on June 10, 2021, to meet transaction costs and provide working capital.