PERTH (miningweekly.com) – Graphite developer Renascor Resources will raise A$6.5-million to fund its Siviour project, in South Australia, towards a decision to mine.

The ASX-listed company will issue more than 240.7-million shares, at a price of 2.7c each to professional and sophisticated investors, over two tranches.

The first tranche will consist of 159.3-million shares, and will raise an initial A$4.3-million under the company’s existing placement capacity. The second tranche placement of more than 81.4-million shares, which will raise around A$2.2-million, will be subject to shareholder approval.

The funds raised will be used to complete a definitive feasibility study on the Siviour graphite project, as well as to fund the submission of a mining lease application, along with further technical assessments of the downstream options available to the Siviour project.

“We are gaining strong momentum in our push to advance Siviour into production by 2020,” said Renascor MD David Christensen.

“In recent weeks our Siviour project has been materially derisked and improved through delivery of a robust prefeasibility study, receipt of highly encouraging spherical and expandable graphite testwork that demonstrates strong potential for Siviour concentrate to produce these value-added products, signing of an initial non-binding memorandum of understanding for graphite offtkae with China’s Qingdao Chengyang Graphite last week, and now this very well-supported share placement to ensure we are fully funded to deliver a definitive feasibility study.”

In addition to the share placement, Renascor will also undertake a share purchase plan to raise up to A$2-million, at the same issue price as the placement.

Christensen noted that on completion of the placement, and assuming a fully subscribed share purchase plan, Renascor would have around A$10-million in cash reserves, which would ensure that the company could continue to advance Siviour at a rapid pace, and provide scope to explore the company’s cobalt portfolio.

A prefeasibility study into Siviour has estimated that the project could deliver some 117 000 t/y of graphite over a 30-year mine life.

The staged development option would require an initial capital investment of $29-million, with the Stage 2 development expected to cost a further $91-million.