Volt set for US$40m bond issue
Promising graphite developer Volt Resources has hosted a group of potential bond investors at the site of its proposed Bunyu project in southern Tanzania with a view to funding the next stage of the project.
The ASX-listed company is well advanced on its flake graphite development that has the potential to catapult it into the ranks of the world’s top three graphite producers.
Volt is preparing to lodge a draft prospectus next week for a US$40 million bond issue on Tanzania’s Dar es Salaam Stock Exchange, which represents an interesting departure from a more typical debt or equity raise normally implemented at this stage of a project.
The bond issue will raise capital to complete the 20,000tpa, stage 1 development of Bunyu and is also a good way to allow meaningful participation in the project from Tanzanian and Ugandan pension funds according to the company.
The recent site visit was hosted by Volt’s Managing Director, Trevor Matthews and included representatives from the company’s bond issue adviser, Exotix Capital and co-lead advisor and placing broker Orbit Securities.
The site visit, which also included local community leaders, covered the planned mine and mineral processing site and the Mtwara port facilities.
Head of Natural Resources for investment bank Exotix, Andrew Moorfield, said the Volt site tour confirmed that East African investors had a robust appetite for US-dollar-linked fixed income instruments listed in Tanzania. “The Volt growth story and management strength is reflected in solid investor feedback.” He said.
Volt has the largest graphite mineral resource in Tanzania and is aiming to be one of the top three global suppliers when a planned stage 2 expansion to 170,000 tpa comes on stream by late 2020.
The prefeasibility study for the expanded project produced some enviable numbers, including a pre-tax NPV of US$1.31 billion over an initial 22-year mine life and a seriously impressive internal rate of return of 87%.
With binding offtake agreements already in place and a supportive looking Minister of Minerals in Tanzania, Volt is racing towards its objective of a development decision on stage 1 by the June quarter.