Volt Resources Ltd has officially completed its transition to become a graphite producer, following the acquisition of a 70% controlling stake in the Ukrainian Zavalievsky Group (ZG) of Companies.

As previously reported by Proactive, Volt has signalled a shift away from graphite exploration and development to become a fully-fledged graphite producer, through a deal with the ZG Group.

That shift is now complete, with news on Tuesday morning that Volt had entered into a new US$4 million convertible security with SBC Global Investment Fund, drawn down in full to fund the acquisition.

Low-risk acquisition complete

Volt managing director Trevor Matthews said the ZG acquisition would rapidly transform Volt’s future in graphite.

“The acquisition of a controlling interest in the ZG Group positions us years ahead of our peer graphite companies without the usual development risks associated with a greenfield project,” he said.

“Volt now has the potential to become a key market participant in the supply of graphite and battery anode materials into the growing European market with excellent access to other markets in the USA and the Middle East.”

ASX-listed graphite producer

Volt is now 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 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

The Zavalievsky mine and processing facilities are adjacent to the town of Zavally, about 280 kilometres south of the Ukraine capital of Kyiv and 230 kilometres north of the main port of Odessa.

ZG Group has current plans to install a processing plant and equipment in order to commence producing spheronised purified graphite (SPG) for the European LIB anode market within the next 12 months.

Zavalievsky mine’s strategic location for the future supply of SPG to the European market has already attracted interest from LIB cell manufacturers and major carmakers.

Terms of the deal

ZG has agreed to defer the second and final instalment of US$3.8 million until July 2022.

Volt has already paid the vendors of the ZG Group the first instalment, comprising an advance of US$150,000 with the balance of US$3.65 million paid on completion of the ZG Group acquisition.

Volt had previously announced the ZG acquisition would be funded through a US$8.5 million loan agreement with JES Green Investments Ltd but that agreement has been terminated as JES defaulted.

– Daniel Paproth