Volt Secures $11.1M Equity Boost to Advance Bunyu Graphite Mine
Volt Resources has locked in a $11.1 million equity investment from Unbounded Opportunities Fund to accelerate development of its Bunyu Graphite Project in Tanzania, aiming to boost production and cut costs.
- USD11.1 million equity investment by Unbounded Opportunities Fund (UOF)
- UOF to hold 62% equity in Volt Graphite Tanzania plc post-financial close
- Revised feasibility study targets 40,000 tpa graphite concentrate at 94% purity
- Project capital cost estimated at USD37 million with operating costs of USD450/tonne
- Volt to arrange 70% debt financing and secure offtake agreements
A New Chapter for Bunyu
Volt Resources Limited has taken a decisive step forward in the development of its Bunyu Graphite Project in Tanzania by executing a binding term sheet with Unbounded Opportunities Fund SPC (UOF). This agreement secures a conditional USD11.1 million equity investment, positioning UOF as the majority shareholder with a 62% stake in the project subsidiary, Volt Graphite Tanzania plc (VGT), while Volt retains 38%.
The partnership marks a strategic pivot for Volt, which has faced funding challenges amid subdued graphite prices. UOF’s involvement brings not only capital but also project management expertise aimed at enhancing production efficiency and reducing costs.
Revised Project Economics and Ambitions
UOF will lead the preparation of an updated feasibility study that sets ambitious targets, an annual production of 40,000 tonnes of graphite concentrate at 94% total graphitic carbon (TGC), a capital expenditure of USD37 million, and operating costs capped at USD450 per tonne. Notably, UOF commits to funding any capital cost overruns without diluting its equity position, while also accepting potential equity reduction if operating costs exceed targets by more than 10%.
This financial discipline and risk-sharing mechanism reflect a pragmatic approach to project execution, balancing incentives between Volt and its new partner.
Governance and Financing Structure
The governance of VGT will shift with UOF gaining majority board representation and management control, signaling a hands-on role in advancing the project. Volt remains responsible for securing non-recourse project debt financing, targeting a 70% debt-to-equity ratio, and for locking in bankable offtake agreements for both coarse and fine flake graphite products.
These arrangements underscore the complexity of bringing a mining project from feasibility to production, requiring alignment of equity, debt, and market commitments.
Regulatory and Market Conditions
The transaction is contingent on several conditions precedent, including securing at least 80% of production under offtake contracts, obtaining project debt financing, clearing land rights, and finalizing agreements with the Tanzanian government, which will hold a free carried interest diluting both Volt and UOF proportionally.
Volt’s Executive Chairman, Asimwe Kabunga, expressed optimism about the partnership’s potential to unlock value and accelerate development, while UOF’s director highlighted their confidence in delivering outstanding results in Tanzania.
Looking Ahead
With a four-month window to satisfy all conditions and close the transaction, Volt and UOF face a critical period of negotiation, feasibility refinement, and financing discussions. Success here could set the stage for Bunyu to become a significant player in the graphite market, supporting Volt’s broader ambitions including downstream graphite refining initiatives in the US.
Bottom Line?
Volt’s new partnership with UOF could redefine Bunyu’s future, but key approvals and financing remain hurdles to watch.
Questions in the middle?
- Will the updated feasibility study confirm the targeted cost efficiencies and production scale?
- How will the Tanzanian government’s free carried interest impact project economics and control?
- Can Volt secure the necessary debt financing and offtake agreements within the stipulated timeframe?