Syrah Resources to raise capital for Balama project development in Mozambique
Syrah Resources is planning to raise A$110m ($87.89m) through an institutional placement and a pro-rata accelerated non-renounceable entitlement offer to allocate funds needed for developing its Balama graphite project in Mozambique.
Construction work at the project is currently close to completion, with commissioning activities having started in May.
As part of the placement process, the company is looking to offer around 7.4 million new ordinary shares to investors at A$3.38 a share to raise around A$25m ($19.9m).
The shares made available under the placement will total around 3% of the company’s undiluted share capital after completion of the entitlement offer.
Under the entitlement programme, the company will offer one new share for every 10.5 shares held, at A$3.38 per share, to raise around A$85m ($67.9m).
Proceeds from the capital raising will be used to meet working capital requirements and costs relating to the ramp-up of production of the Balama project.
In addition, proceeds will be directed towards project development and other expenditure in connection with the commercial acceleration of the company’s battery anode material (BAM) strategy.
The company indicated that debt funding is an expensive option and restrictions imposed on the use of funds and other requirements proposed by debt financiers are expected to restrict spending on strategic options.
Earlier this month, the company signed an agreement to sell graphite from the Balama operation to Chinese battery anode manufacturer Shenzhen BTR New Energy Materials’ (BTR) subsidiary Jixi BTR Graphite Industrial.
The project has a combined proven and probable reserves of 81.4 metric tonnes (Mt), with contained graphite of 13.2Mt.