PERTH (miningweekly.com) – ASX-listed Battery Minerals has deferred first graphite shipments from its Montepuez graphite project, in Mozambique, after Resource Capital Fund (RCF) terminated a $30-million debt and equity funding agreement.
RCF told Battery Minerals that despite the first-phase due diligence being completed successfully, the graphite market no longer met the company’s investment criteria.
Battery Minerals MD David Flanagan told shareholders on Wednesday that while the company respected RCF’s decision, the latest graphite market intelligence available to the company, and the broader market, demonstrated that the outlook for graphite prices and demand, remained highly attractive.
“Our view is that the graphite market outlook continues to strengthen, driven by the impending surge in demand for graphite from lithium battery manufacturers, as well as refractory products and the rapidly growing expandable graphite market.”
Flanagan said that even in the absence of any further increases in graphite prices, and based on costs derived from feasibility and engineering studies, the company was still expected to generate operating margins of about $500/t at the Montepuez project.
“Our Stage 1 project delivers 50 000 t of graphite concentrate a year; this would deliver operating cash flow of about $20-million to $25-million a year. It’s a very strong project, and that’s just the start.”
The project was expected to expand to about 100 000 t/y of flake graphite concentrate by 2020.
With the termination of the RCF arrangement, Battery Minerals will now pursue alternative financing options to fund the Montepuez project, with the company restarting discussions with other potential debt, and other, financiers.
Depending on the timetable of these discussions, the first graphite shipment from Montepuez is likely to be deferred by at least three months.
The company, meanwhile, will also continue with a share placement and securities purchase plan to raise some A$25-million, subject to shareholder approval.