It should be full-steam ahead for the Vatomaina graphite project in Madagascar after joint-venture participant StratMin Global Resources PLC (LON:STGR) announced a novel fund-raising.
Working with a corporate investor that is an existing stakeholder in Bass, StratMin has agreed to assign security and voting rights over its entire Bass holding to the lender, in return for a 12-month non-recourse loan facility. The loan will be repaid in some or all of the Bass shares, with no cash amounts payable, and no interest payments.
StratMin became the largest shareholder in Australian Stock Exchange-listed Bass Metals Ltd after it sold its Graphmada investment to the Aussie firm.
The loan will be used to fund StratMin's investment commitment to the Tirupati Resources Mauritius (TRM) joint venture and for general working capital.
TRM owns the Vatomaina project in Madagascar, a 12,000 ton per annum large-flake graphite project, currently being developed by Tirupati Carbons and Chemicals Pvt Ltd.
The redemption amount of the loan is set at 120% of the amount drawn down – referred to as the basic redemption value - plus 50% of the value of the Bass shares in excess of the basic redemption value,
"By working with existing Bass stakeholders and leveraging the value of the voting block held by the company, we were able to secure funding on terms well in excess of the open market value of the Bass share holding,” said Brett Boynton, chief executive officer.
“This facility gives us capacity to fully fund our commitment to our joint venture partner without any delay to the planned development of the Vatomaina project. Now that Vatomaina is funded, we will work with Tirupati to release a detailed project review and update for shareholders within the week," he added.