Volt Resources' (AX:VRC) small A$1m convertible loan issue will be used for general working capital purposes. Obviously, of greater importance is the ultimate result of current proposed changes to the Tanzanian mining code. From our view of current events, this appears to relate to the issue of old highly favourable tax arrangements with gold miners. As such renegotiation of these existing agreements will not affect Volt, which does not have one as it is a pre-development mining company. Overall, the changes seem to be focused on precious metal and gemstone mining, and graphite (an industrial mineral) has its royalty level of 3% unchanged.
Offtakes: Getting commercial terms in place for ‘18
Volt has a dedicated marketing team for its future graphite products, sending out samples to prospective customers, with feedback used to help refine processing and product quality control. Volt so far has four agreements covering all its planned phase 1 output of 20ktpa, and potentially up to 51kt if all agreements convert to commercial offtakes. Recently, and after Tanzanian mining code changes hit the media, Volt signed an offtake term-sheet with a Chinese company for an initial 10kt per annum of flake graphite product. This agreement could be seen as supportive of Namangale’s development despite the current uncertainty in Tanzania.
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