Volt Resources Ltd (ASX:VRC) is proceeding with the issue of US$40 million in structured debt funding to assist in the development of the Bunyu Graphite Project in Tanzania.
The company engaged Exotix Capital to undertake a Tanzanian Bond issue to raise the required funding for the development of stage 1 of the Bunyu project.
Following recent meetings with investment groups in Tanzania, Uganda and Kenya, Exotix has recommended Volt proceed with a formal bond prospectus.
It has also advised Volt to list the bonds on the Dar es Salaam Stock Exchange (DSE) in Tanzania.
This builds on an option funding agreement negotiated in early December.
READ: Volt Resources raises further funds to fast-track Bunyu Graphite Project
Funding provides project development working capital of circa US$31 million
Funding arrangement will allow net project development and working capital of circa US$31 million.
It is estimated that the facility interest and bond maturity payments can be serviced by projected project cash flows.
Importantly, the US$40 million debt sizing allows meaningful participation from Tanzanian and Ugandan pension funds combined with other investment groups seeking income investments.
Increased size of bond issue provides financial flexibility
Trevor Matthews, chief executive, said: “We are buoyed by the level of support received from the Exotix bond roadshow.
“The appetite for investing in local resource projects in this market is evident, and the increased sizing of the bond issue provides us with added financial flexibility as Bunyu is developed over the next 12 months.”