Montepuez project moves forward as Battery Minerals accepts $US30m

Battery Minerals and Urbix have teamed up for a joint venture at the Montepuez graphite project.

Battery Minerals’ Montepuez graphite project in Mozambique has taken “another significant step” towards being fully funded following the company’s acceptance of a $US30 million ($39.9 million) debt and equity package from Resource Capital Funds (RCF).

Receipt of the money is subject to conditions that Battery Minerals raises a further $28.3 million via the issue of new equity.

Battery Minerals was awarded a mining licence for the project by the Mozambican Government in March, and is currently working towards first shipment in the March 2019 quarter.

In December 2017, the company secured a heavily oversubscribed $20 million placement from investors, and throughout December and January, the company secured offtake agreements representing over 80 per cent of forecast annual production.

It is one of two major graphite projects for the company, along with Balama Central, which has just completed a scoping study with an estimated aggregate of 110,000t per annum of production.

Under the terms of the agreement, Battery Minerals will borrow $US25 million from RCF at a 10 per cent per annum interest, and RCF will subscribe to $US5 million worth of fully paid Battery Minerals ordinary shares. In addition, Battery Minerals will pay a 2 per cent establishment fee of 2 per cent and grant 333 million options at 10 cents each exercisable for up to five years.

Battery Minerals managing director David Flanagan said the debt and equity package was a significant milestone.

“We are particularly pleased that an investor of the calibre and experience of RCF wished to invest in us and they had confidence in the team, as we strive to be producing graphite concentrate and generating substantial cashflow in less than a year,” he said.

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