JOHANNESBURG (miningweekly.com) – Australian junior Kibaran Resources is poised to finalise project financing for development of its Epanko graphite project, in Tanzania, after raising $2-million through a share placement at 15c apiece.
As an additional funding mechanism, the placees would receive one free attaching option for every two shares subscribed. The options were exercisable at 20c apiece and expired six months from the date of issue.
The proceeds would be used in part to complete the due diligence process on Epanko being undertaken by KfW IPEX-Bank, the development funding agency of the German government, and independent engineering firm SRK.
KfW provided indicative terms and conditions to Kibaran concerning $40-million in debt funding for Epanko. Finalisation of this debt facility was subject to a due diligence process, including a peer review of the project’s feasibility study.
Epanko had an estimated capital cost of $77.5-million, of which $40-million was expected to be funded by the KfW facility. This was based on initial production of 40 000 t/y of natural flake graphite concentrate, generating yearly earnings before interest, taxes, depreciation and amortisation of $33.6-million.
Meanwhile, resources financier Nedbank had also given Kibaran an expression of interest to provide a further $30-million debt facility. Completion of these two debt facilities would pave the way for Kibaran to secure complementary project equity finance.
Site works were scheduled to start within three months of securing debt and equity finance with first production forecast to take place nine months from then.
Kibaran signed a binding long-term offtake agreement with German integrated materials and technology company ThyssenKrupp for 20 000 t/y of graphite concentrate and recently announced a memorandum of understanding (MoU) with Sojitz Corporation, one of Japan’s largest trading conglomerates.
The MoU was aimed at using Epanko graphite in the high-growth lithium battery industry expected from the electric vehicles and energy storage markets.