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Metals of Africa plans A$4.5M fundraising to develop Mozambique graphite mines


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Metals of Africa plans A$4.5M fundraising to develop Mozambique graphite mines

ASX-listed Metalsof Africa Ltd. said May 6 that it will raise A$4.5 million via shareplacements to institutional shareholders and a share purchase plan to existing stockholders,with the funds slated for financing the company's development of graphite minesin Mozambique.

Metals of Africa confirmed plans to raise A$4 million via twoseparate share placements to sophisticated and institutional investors startingMay 13, for a total placement of 72,727,272 shares at 5.5 Australian cents apiece,representing a 15.6% discount to the stock's 10-day average price.

A separate share purchase scheme aimed at raising A$500,000 willallow Metals of Africa's existing eligible shareholders to buy up to A$15,000 worthof shares at the same discounted price offered under the share placement to sophisticatedinvestors.

The funds raised will be used to finance a feasibility studyof the company's Montepuez Centraland Balama Centralgraphite projects in Mozambique, including additional sampling and metallurgicaltest work required to sign off-take agreements with potential customers.

The funds will also help progress spherical graphite studiesat Metals of Africa's test mill in the U.S.

Metals of Africa also confirmed that two contractors would forgo50% of their fees in lieu of shares issued at the same price as the share placement.CPC Engineering agreed to take 50% of its fee in the form of stock, up to A$350,000,while drilling contractor Mitchell Group agreed to take 50% of its fees, cappedat A$200,000, in the form of the discounted shares.

Metals of Africa Managing Director, Cherie Leeden, said, "The capital raising will strengthen the company'sbalance sheet [and] enhance our ability to rapidly develop our world-class Montepuezand Balama Central graphite projects."

"Our graphite projectshave the potential to be very low-cost suppliers to the rapidly expanding lithium-ionbattery anode market and our feasibility study works are aimed at delivering onthat objective," she was quoted as saying.

The company estimatedits graphite production costs at its planned Montepuez mine at approximately US$300per tonne, or only slightly above fellow ASX-listed Syrah Resources Ltd., which is already building the nearbyBalama mine.

The company is aimingto complete the first tranche of its share placement by May 16. The second tranche,which will require shareholder approval, should take place after the June shareholdersmeeting, the company said.