Published: November 1, 2018 |

[Click image to enlarge]

Graphex Mining Ltd has entered into a US$5-million loan note subscription agreement with global private investment firm Castlelake LP to fully fund the Chilalo Graphite Project through to production.

Graphex also signed a term sheet setting out proposed terms under which Castlelake and other market participants will provide up to US$40 million in equity and up to US$40 million from issuing senior secured loan notes.

Proceeds from interim loan notes will be used to advance the project and satisfy conditions for the overall funding package.

Graphex Managing Director Phil Hoskins said the company was pleased to have agreed the financing transaction which represented a major milestone.

He said: “We can now proceed with completion of the bankable feasibility study (BFS) with a view to Graphex becoming a leading supplier of premium coarse flake graphite.

“We take great confidence from the commitment of a global private investment firm, which follows a period of extensive due diligence.

“We believe this transaction affirms the quality of the Chilalo project, the premium product it will produce, the graphite market opportunity identified by the company and confidence in the company’s ability to reach a satisfactory resolution in Tanzania.”

Material conditions that must be satisfied for the larger funding package include:

•  Conversion of the term sheet into transaction documents;

•  Completion of a BFS;

•  Completion and satisfaction of ongoing Castlelake due diligence and approvals;

•  Resolution of issues relating to Tanzania’s revised mining legislation; and

•  Execution of material contracts including offtake, mining and engineering-procurement-construction (EPC).

The final financing amount for the funding package will be determined by the BFS and is expected to fund all associated costs and allowances typical for the construction of a mining project.

A completed Chilalo pre-feasibility study indicated robust project economics, with 8.5-year life-of-mine delivering: a post-tax net present value of US$349 million; a post-tax internal rate of return of 131 percent; and a post-tax payback period of 0.84 years.

Source: Proactive Investors

About Graphex Mining
Graphex Mining Ltd is listed on the Australian Securities Exchange.

To stop by Graphex’s website, CLICK HERE

Be in-the-know when you’re on-the-go!