Graphex rebounds on Chilalo funding commitment

Shares in Tanzania-focused Graphex Mining rebounded after the company announced it had struck a revised agreement with its Chinese partner over the Chilalo graphite project.

Graphex, a spin-out company of Indiana Resources, said the syndicate of investors led by CN Docking Joint Investment & Development Company, had agreed to revised terms of a joint venture and equity investment deal for Chilalo.

CN Docking and Graphex will retain a 50:50 joint venture structure and equally reduce their interest in Chilalo when the Tanzanian government acquires a 16 per cent free-carried interest in the project as part of a number of legislative changes that will soon hit all mining companies operating in the African country.

CN Docking will pay up to $US17 million ($A23 million) to acquire a 42 per cent stake in Chilalo, down from its previous commitment of up to $US20 million for a 50 per cent stake as announced in May.

Other terms of the proposal between Graphex and CN Docking, including offtake and prospective financing for Chilalo, remain unchanged.

The news sent Graphex shares up 37.2 per cent to 29.5 cents each by 1pm.

Graphex shares were worth 38.5 cents each at June 30, before the legislative changes in Tanzania were revealed.

“This revised agreement is a tremendous vote of confidence in the quality of our Chilalo project and demonstrates how committed our Chinese partners are to concluding the joint venture, offtake and financing arrangements,” Graphex managing director Phil Hoskins said.

“To have reached this position less than two weeks since the announcement of the proposed legislation changes in Tanzania is testament to the strength of the relationship between Graphex and the CN Docking-led syndicate built over the last 2 years.

“We are currently making arrangements for a visit to Tanzania by board and management of the CN Docking-led syndicate as they have requested meetings with senior government officials and will also tour the Chilalo project site and supporting infrastructure.”