PERTH (miningweekly.com) – Graphite developer Graphex Mining has secured a funding package to fully fund the development of its Chilalo project, in Tanzania.
The ASX-listed Graphex on Monday told shareholders that it had entered into a loan note subscription agreement with global private investment firm Castlelake to raise $5-million from the issue of secured interim loan notes, which will be available immediately.
Graphex has also inked a term sheet with Castlelake and other market participants providing up to $40-million in equity and up to $40-million from the issue of senior secured loan notes.
The final financing amount for the senior funding package will be determined by the bankable feasibility study (BFS) for the Chilalo project, and is expected to fund all associated costs and allowances typical for the construction of a mining project.
The proceeds from the interim loan notes will be used to advance the project to be able to satisfy the conditions precedent for the senior funding package, and if the conditions of the senior funding package are not satisfied within two years, the amount outstanding under the interim loan notes will become immediately repayable.
“We are pleased to have agreed this financing transaction, which represents a major milestone for our company,” said Graphex MD Phil Hoskins.
“We can now proceed with completion of the BFS with a view to Graphex becoming a leading supplier of premium, coarse flake graphite.”
An update to the 2015 prefeasibility study for the Chilalo project assesses a two-stage production scenario, under which Stage 1 will produce about 58 000 t/y of graphite for the first two years of operation and the Stage 2 expansion starting in the third year will produce about 104 000 t/y.
Stage 1 capital cost has been estimated at $43.6-million and Stage 2 at $32.5-million.