Battery Minerals Ltd (ASX:BAT) has received firm commitments to raise $20 million from a share placement to progress its strategy to develop the Montepuez Graphite Project in Mozambique.
The placement was at 6 cents per share and was over-subscribed amid strong demand from existing shareholders and institutional investors in Australia and overseas.
Battery Minerals will use the proceeds to continue the construction of the Montepuez Graphite Project, where commissioning is set for the March quarter of next year.
Stage One at Montepuez will produce 45,000 to 50,000 tonnes a year of graphite concentrate, which will generate about US$25 million of net operating cashflow a year, based on current prices.
Construction at Montepuez is well-advanced
Battery Minerals managing director David Flanagan said the highly successful raising marked another step towards commencing production and cashflow from the Montepuez Graphite Project.
Flanagan added: “We were overwhelmed with offers from investors who were attracted to the short lead time to production and cashflow.
“Construction at Montepuez is already well-advanced. We have ordered our long lead items and these will be delivered over coming months. We commissioned our crushing circuit last week.”
Binding offtake agreements signed
Battery Minerals recently signed four binding offtake agreements for up to 41,000 tonnes per annum of graphite concentrate, representing over 80% of Montepuez’s forecast annual production.
The Mozambican government has already granted the company a mining licence for the project and has accepted the company’s EIA (environmental impact assessment).
Share purchase plan
In addition to the placement, Battery Minerals will undertake a securities purchase plan (SPP) to existing shareholders.
This will allow each shareholder to apply for up to $15,000 of shares by 22 June 2018 at a price of 6 cents per share.