Sarytogan Graphite (ASX: SGA) has received a second tranche of cash equity investment to advance its graphite project in Kazakhstan.
The company has instructed the share registry to issue 14,742,437 shares to the EBRD that, upon completion, will hold 17.3 per cent of the company’s issued capital.
The latest transaction was completed at 16 cents per share, representing more than a 166 per cent premium on the company’s 0.06c closing price at the end of last week.
The second tranche payment follows last November’s first tranche of $2,641,210 in cash for the issue of 16,507,563 shares to the EBRD.
The combined tranches constitute a total equity investment of $5m for 32,250,000 shares in Sarytogan.
The bank last year sought approval from Australia’s Foreign Investment Review Board to invest up to the 19.99pc maximum under the takeover provisions of the Corporations Act for further placements over the next 12 months, subject to any investment beyond the agreed tranche two being entirely at the bank’s discretion.
Australia’s Treasury gave notice in December last year that it has no objection to the acquisition at any time before December 2025. This gives the EBRD absolute discretion to make further investments in Sarytogan this year.
Mining consultants RPMGlobal Asia Limited has also delivered favourable assessment from its peer review of some of Sarytogan’s prefeasibility study for the Kazakhstan graphite project.
The review concluded the project contains no fatal flaws and offers considerable promise.
RPM identified some risks typical for such an early stage in the development of the project but assessed them as manageable through additional testwork and plant design modifications. This should improve confidence and its practical workability before a planned feasibility study is delivered.
The completion of the equity investment from the EBRD reaffirms the global significance of the Sarytogan graphite project. This funding allows us to accelerate the ongoing works on the definitive feasibility study for the project. The recent independent peer review of the project by mining consultant RPM Global shares our optimism for the project and is the first of many examples of the EBRD adding value to the project beyond their financial investment.
Sarytogan Graphite Managing Director Sean Gregory
The company proposes using its EBRD funding to pick up the pace towards a planned project definitive feasibility study, which will include ongoing work to prepare customer samples to support the company’s graphite marketing.
Additionally, the latest funding will help develop the project’s environmental and social impact assessment beyond the environmental permit received for the mine in late December.
Other works in progress include Perth-based testwork on metallurgical variability and infill drilling of the mining pits identified for the first 20 years of operation.
Water investigations are also necessary to secure the company’s water licence for the project, and power and transportation studies are aimed at securing infrastructure allocations.
The important works will preceded or be accompanied by tendering for the engineering scope of the definitive feasibility study.
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