The European Bank for Reconstruction and Development (EBRD) has ploughed $2.64m into ASX-listed Sarytogan Graphite (ASX:SGA) to take equity in the graphite developer at 16c a share – double its closing price of just 8c a share on Thursday. The cash injection represents the first of two expected equity investments by EBRD in the company.
Sarytogan’s share price was up around 25 per cent in intraday trading to touch 10c after revealing it can kickstart the long-awaited development of its graphite project in central Kazakhstan, 190km from the industrial city of Karaganda.
As flagged within a series of previously announced transactions, a newly signed partnership between Sarytogan and the EBRD, is a watershed moment for Sarytogan allowing several strategic projects to proceed.
The initial $2.64 million investment in Sarytogan will give the EBRD a 9.99 per cent stake in the mineral explorer. By early February 2025 EBRD expects to increase its investment in Sarytogan to $5 million, leaving it with a 17.36 per cent stake, making it the company’s second-largest shareholder. The EBRD has also sought approval from FIRB to invest up to the 19.99 per cent ceiling in further placements over the next 12 months.
In addition to the recruitment of key management positions, the company says new funding means several value adding work streams can now be awarded, including the milling of a 20t bulk sample in Kazakhstan, followed by airfreight of samples to Australia and then to the US for generation of several hundred kilograms of samples for customer and vendor test work.
Testing of the “Micro80C” product for use as the carbon raiser to make ductile cast-iron, will also compliment the recent successful testing of grey cast-iron made with Micro80C.
This equity investment from the EBRD has greatly uplifted the standing and credibility of the Company to a level that belies our current market capitalisation. The support of the Kazakh Government has been exceptional as has the level of interest from institutional investors. All recognise the extraordinary depth of technical and legal due diligence that the Company has passed to achieve this important milestone. Sarytogan Graphite managing director Sean Gregory
Management believes the equity investment from the EBRD is a major boost to the company’s standing and credibility to a level that belies its current market capitalisation.
The consummation of the EBRD’s partnership with Sarytogan today was recently highlighted by the European bank as a prime example of how countries are working together on critical mineral supply chains. Sarytogan has also secured the backing of the Kazakhstan Government for its project with the Kazakhstan Vice-Minister of Industry and Infrastructural Development, Iran Sharkhan, offering to help smooth out any necessary approvals.
The next big milestone for Sarytogan will be securing the environmental permit for its mining licence, which, according to management, is well on its way. As land studies for the purification plant push forward, the town of Agydyr is still in the running to win selection, with the final decision expected soon.
The project has a long history dating back to Soviet-era exploration in the 1980s. Since taking up ownership in 2018, Sarytogan’s work has uncovered an impressive resource estimate of 229 million tonnes of graphite at 28.9 per cent total graphitic carbon at an impressive purity of 99.9992 per cent – otherwise known as the “five 9s” standard. Further metallurgical tests revealed a recovery rate of 81.4 per cent for the concentrate.
Armed with its initial resource estimate and successful test results, management then moved forward to conduct a prefeasibility study which was released last month. The study has laid out plans to produce 50,000 tonnes of three unique graphite products each year, with a focus on using smaller, modular processes that can easily be scaled up in the future.
With a TGC grade approaching 30 per cent, Sarytogan’s project is one of the best out there – which might explain its $800m predicted net present value.
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