Metals of Africa Limited has received commitments from institutional investors for an oversubscribed placement to raise A$9m ($6.93m).

Proceeds will help the company advance its graphite projects in the Cabo Delgado Province in Mozambique.

The placement will be completed by issuing 100 million fully paid ordinary shares each priced at A$0.09. The placement will be accomplished in two tranches. 

In the first tranche 78.51 million shares will be issued that would raise A$7.05m, while the second tranche is expected to raise A$1.95m by issuing 21.69 million shares.

The first tranche will be completed using the company’s existing placement capacity but the second one requires shareholder approval.

Metals of Africa managing director Cherie Leedon said: “This was a very heavily oversubscribed raising, which was strongly supported by existing shareholders. The high level of demand for the placement is a big tick for the work we’ve done to date at our graphite assets in Mozambique.

“The potential of the battery minerals industry is enormous and graphite is a key ingredient in all lithium ion batteries, arguably the most important battery of our time.

“We are advancing high-quality projects in the best graphite province in the world. The definitive feasibility study at the Montepuez project will be completed in December and the funds raised will allow us to rapidly commence building a project team to develop the project and deliver value for shareholders.”

"The potential of the battery minerals industry is enormous."

The procured fund will be used to continue the development of Montepuez and Balama Central Graphite Projects. With this fund, the company plans to conduct spherical graphite feasibility study which is expected to get completed by second quarter of 2017.

Metals of Africa will also utilise the proceeds for early mining earthworks and construction, infill and incremental strike extension drilling and complete the on-going pilot plant test work.

The fund will also help the company procure approvals and associated mining work permits.

The remaining balance will be used to appoint board and management personnel and for general working capital.

Morgans Corporate Limited was lead manager for this placement.

Image: Graphite crystals. Photo: courtesy of Mike Beauregard/ Wikipedia.