Battery raises $30M for development

4th May 2018
Resources Rising Stars

Former Atlas Iron impresario David Flanagan just worked his magic again, raising US$30 million in debt and equity to support development of Battery Minerals’ Montepuez graphite project in Mozambique (reports MiningNews).

Denver-based Resource Capital Funds, which invests in 170 miners across the globe, including Aussies Bannerman Resources, Geopacific Resources and Champion Iron, has signed a terms sheet for a $25 million loan and $5 million of equity in Battery.

The three-year loan comes with a 10% per annum interest rate, and RCF will also be issued 333 million 10 options, valid for five years, as part of the deal.

The equity price will be determined as the lowest price at which shares are issued between execution of the RCF term sheet and completion of the RCF equity subscription.

Battery shares were up 3.2% this morning to A6.5c, valuing the company at almost $50 million, and have traded over the last year between a low of 5.6c and 11c, a peak it hit in January when Flanagan moved from executive chairman to managing director to guide the company into production.

A key condition of the RCF package is that the junior raise a further $28.3 million in new equity on the same terms

Once complete Flanagan said the funds would ensure Montepuez is fully funded for its development.

"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," Flanagan said.

The company intends to ship its first cargo from East Africa within the March 2019 quarter, and will ramp up to 45,000-50,000 tonnes per annum at an average flake concentrate grade of 96.7% total graphitic carbon.

The company has offtake agreements for 80% of its production with Chinese buyers.

Montepuez is due to be commissioned in the December quarter of this year, with site works underway and long-lead items ordered.

It was awarded its mining licence in March.

By 2020 the company wants to more than double Montepuez production to over 100,000tpa.

It is also studying the development of the 110,000tpa Balama Central project to the south by 2022, pending completion of a definitive feasibility study in the September quarter.

Development of Balama was estimated to cost US$50 million for a 10-year life in a March scoping study.

The company is also assessing the potential to recover 280,000t of vanadium across both projects from the graphite tailings.

Battery had A$13 million in cash at the end of March following a $20 million placement and drill-for-equity arrangement completed last November.


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