Volt Resources Ltd Closes In On Graphite Production With Signed Loan Agreement And US $ 4 Million Drawn To Acquire ZG Group

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The acquisition is expected to be finalized next week and will instantly transform the company into one of the few ASX-listed graphite producers.

() (FRA: R8L) signed a full loan agreement and associated security documents with European investment firm JES Green Investments Limited for the provision of a US $ 8.5 million loan facility to assist to the financing of the acquisition by Volt of a 70% stake in the Zavalievsky (ZG) group of companies.

The first tranche of US $ 4 million has been drawn, providing the funds for Volt to complete the acquisition and related expenses as well as to provide working capital.

This acquisition is expected to be finalized in the week of June 7, 2021, with Volt CEO Trevor Matthews traveling to Ukraine to attend the ZG Group acquisition finalization meeting.

ASX listed graphite producer

The company sees this transaction as a logical and value-creating step and will instantly transform Volt from an explorer and developer of graphite to a producer of graphite.

Volt will become one of the few ASX-listed graphite producers without the usual time and risk involved in financing, building, commissioning and ramping up an entirely new project.

Zavalievsky’s graphite business in Ukraine has the following advantages for Volt:

  • Located in Eastern Europe close to key markets with significant developments in LIB facilities planned to serve European automakers and the renewable energy sector;
  • Plans to produce battery anode material using existing graphite production to become a fully integrated supplier to LIB cell manufacturers based in Europe;
  • Manufactures graphite products across the range and has the potential to significantly increase its production of large, high value-added flakes;
  • Produces a high value 99.5% purified “green” TGC product;
  • Long-life, decades-long production mine that has additional exploration potential;
  • Existing customer base and supply chains of graphite products that Volt hopes to be able to tap into to develop its existing Bunyu graphite project in Tanzania;
  • Excellent transport infrastructure covering road, rail, river and sea freight, combined with a reliable electricity network, sufficient supply of drinking water and good communications;
  • An experienced workforce who can assist in training, commissioning and scaling up the development of the Bunyu graphite project;
  • Potential to generate significant cash flow that could allow Volt to internally fund business costs and working capital in the future;
  • Co-products of quarry stone for the domestic market and garnet for the European market which could generate material cash flows for relatively low capital; and
  • A 79% interest in 636 hectares of freehold lands, with the mine, processing plant and other buildings and facilities located on these lands.

First installment of US $ 3.8 million

Volt is required to pay the first installment of US $ 3.8 million to the ZG Group vendors upon completion of the acquisition.

The sellers of the ZG group will provide signed share transfers whereby Volt will acquire the 70% stake and control of the Zavalievsky group of companies.

The final installment of US $ 3.8 million is payable six months after completion of the transaction.

Second installment available on June 10

There is a change to the previously announced terms with the exercise price for the second tranche of 25 million options now agreed to at $ 0.06 per Volt share.

The two 25 million option tranches now have an exercise price of $ 0.06 per Volt share.

Additional funding from a second tranche of US $ 4.0 million will be available on June 10, 2021 to cover transaction costs and provide working capital.


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