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Magnis Resources Limited (ASX:MNS) reported raising A$6.5 million in a private placement for the advancement of its Nachu Graphite project. The company received strong support from sophisticated and institutional investors from Australia and overseas for the placement.
As quoted in the press release:
Bell Potter Securities Limited was appointed as Lead Manager to the Placement which consisted of
26,000,000 shares issued at A$0.25 per share.
Funding will be used to complete environmental study works, pre-engineering and other works
required to fast-track Nachu into production.
Magnis Resources Chairman, Frank Poullas, said:
We are encouraged by the strong interest shown in our capital raising from both local and overseas investors. The board and management team are focused on bringing Nachu into production in the second half of 2016, we are currently working closely with our partners to achieve this goal.
Click here to read the Magnis Resources Limited (ASX:MNS) press release
Click here to see the Magnis Resources Limited (ASX:MNS) profile.
About Magnis Resources
Magnis Resources (ASX:MNS) is a near term graphite producer with a 100% owned Nachu graphite project in Tanzania. The Company currently has the largest binding offtake agreement in the world with China National Materials Import and Export (SINOMA), a subsidiary of China National Materials Group, for 80,000 tonnes of graphite per annum for a period of 5 years with an option to extend. At current market price, yearly revenues equate to over US$160m or over US$800m over 5 years.
The Nachu project has a maiden JORC resource of 156 million tonnes at 5.2% graphite, with over 84% of the product consistently produced in Large and Jumbo flake graphite categories. Initial metallurgical results from basic floatation have yielded 95.2% total graphitic carbon (TGC), and 97% TGC for Jumbo flake product (+300microns)
Offtake Agreements
A binding offtake agreement was signed in December with China National Materials Import and Export Corporation (SINOMA). SINOMA is a subsidiary of major state owned enterprise responsible for the research, development, construction, production and marketing of non-metallic products in China. SINOMA also is a major supplier of graphite to the Japan battery market. Under the Offtake Agreement, SINOMA has agreed to purchase 80,000 tonnes of graphite per annum across all size ranges for a period of 5 years with an option to extend.
In September, a memorandum of understanding was signed with Sinosteel Liaoning Co Ltd and Dalian Intercontinental New Materials Corp. for 100,000 tonnes per annum, for an initial 10 years with an option to extend.
A second binding offtake agreement was signed in December 2014 with China-based Sinosteel Liaoning, for 100,000 tonnes of graphite per annum across all size ranges for a period of 10 years with an option to extend for a further 5 years.
Pre-Feasibility Study
In December 2014, the Pre-Feasibility Study was released. Key items from the PFS include:
- An after tax NPV of US$1,040 million, IRR of 84% (discount rate 10%) and a capital payback period of 1.4 years.
- 16 year project life based on Blocks F and FSL in Indicated and Measured categories.
- The Project’s design criteria, the capital cost estimate and the operating cost estimate were based on a project producing 180,000 tonnes of graphite concentrate per annum with an average ore grade of 5.1% graphite.
- The capital cost estimate of USD $171.4 million includes all processing facilities, infrastructure, dams, roads, owners’ costs, environmental and social costs needed to develop the Project from when the Board gives its final commitment.