Jul. 17, 2017 - Volt Resources has signed its fifth offtake agreement this year filling 100% of proposed Stage 1 capacity at its flagship Namangale graphite project in Tanzania.
The company signed a non-binding offtake term sheet with Qingdao Tianshengda Graphite for 10,000 tonnes per annum of flake graphite product from Stage 1 production.
This is the fourth agreement that Volt has signed with a Chinese graphite group since management completed a successful product marketing trip in May 2017.
Volt confirms that recent changes to Tanzania’s mining laws have not deterred customer’s confidence in management’s ability to start production at the Namangale project by mid-2018.
Trevor Matthews, CEO, commented: “It is encouraging to see our business as usual approach with prospective customers has delivered our fourth agreement with a Chinese group this year.”
Qingdao off-take details
Qingdao, which is a large processor and distributor of graphite products in China, signed a detailed non-binding offtake term sheet for 10,000 tonnes per annum of flake graphite product from Stage 1 production.
Volt and Qingdao are targeting 30 September 2017 to complete a binding offtake agreement.
Volt now has indicative commitments for a minimum 36,000 tonnes per annum to a maximum 51,000 tonnes per annum of graphite product for Stage 1 production, which is nominally set at 20,000 tonnes per annum.
Notably, the diversity among the prospective clients’ intended uses of Volt’s product includes graphene, expandable and spherical graphite.
Recent loan secured to fast-track Namangale
Volt recently raised $1 million for working capital purposes from institutional and sophisticated investors through a 12-month convertible loan facility.
The loan will act as important interim funding while Volt executes its strategy to fast-track mining operations at its flagship Namangale graphite project in Tanzania.
The terms of the convertible loan funding demonstrates the confidence that these investors have in Volt’s strategy.
During the fourth quarter of 2017, the board expects circa $4.8 million will be received from the exercise of Volt’s listed $0.02 options which mature on 31 December 2017.
With the recent changes to Tanzania’s mining legislation unfolding, this deal can be seen as a vote of confidence in Volt’s ability to bring Namangale into production despite the evolving regulatory environment.
Collectively, Volt now has up to 51,000 tonnes per annum in confirmed and indicative commitments for Stage 1 production.
This is another vote of confidence in the Namangale project and shows the increasing demand for our expandable graphite products.
The sales and cooperation agreements are important development milestones while Volt advances discussions with financial institutions and strategic investors to secure development funding for Stage 1 production.
Given the strategic importance of the China market and the success of the last trip, management is currently undertaking a follow up visit with key customers.