TSX-V-listed Giyani Metals has secured $10-million in funding from private equity fund ARCH Sustainable Resources Fund.
The funding fulfils a key condition for the drawdown of a $16-million convertible loan facility secured from South Africa’s Industrial Development Corporation.
The combined $26-million in funding will be used to progress Giyani’s K.Hill battery-grade manganese project, in Botswana, to a final investment decision.
Activities will include an optimised feasibility study and completing the construction, commissioning and operation of a demonstration plant to produce battery-grade manganese (HPMSM). The demonstration plant will enable Giyani to progress offtake discussions with potential buyers.
The ARCH funding package comprises a $4.8-million unit offering at C$0.117 per unit, with each unit consisting of one common share and one common share purchase warrant exercisable at a price of C$0.225 per warrant for five years; and $5.2-million for a 2% gross revenue royalty, which includes a 1% buyback provision and an automatic step-down by 0.5% after 20 years or 2.5-million tonnes of HPMSM produced.
Following completion of the ARCH offering, the private equity fund will hold about 19.99% of Giyani’s shares.
“We are delighted to welcome ARCH as a shareholder and strategic partner to assist us in the long-term development of K.Hill. Attracting a group with such strong environmental, social and governance credentials rewards the hard work that the team has undertaken to date and confirms our execution strategy.
“After completing an incredibly thorough due diligence process performed by world-class engineering, marketing and social and environmental consultants, we are very excited to welcome two high-quality investor groups to the company.
“Despite the difficult market conditions, the package we have secured minimises dilution for current shareholders and gives us the financing to fundamentally de-risk the project and unlock the massive value contained within K.Hill,” comments Giyani president and CEO Danny Keating.
“ARCH is very happy to announce its strategic investment in Giyani Metals, recognizing the unique opportunity it presents in the rapidly growing global battery market due to the crucial role HPMSM will play in the future of lithium-ion batteries.
“Once operational, Giyani’s plant will showcase the commercial viability of the team's proprietary low-carbon technology, positioning the company among the select few with high-quality projects capable of contributing to a diversified global supply chain, and provide manufacturers with responsibly sourced, low-carbon battery materials,” adds ARCH MD Amanda van Dyke.