Giyani Metals Corp. (TSXV:EMM, GR:A2DUU8)
("
Giyani" or the "
Company"),
developer of the K.Hill battery-grade manganese project in Botswana
(“
K.Hill” or the “
Project”), is
pleased to announce that it has signed definitive agreements for
US$16 million of financing with the Industrial Development
Corporation of South Africa Limited (“
IDC”) in the
form of convertible loan facilities.
Highlights:
-
The IDC financing is the cornerstone of a US$26 million funding
package that will over the next 15 months progress K.Hill to a
Final Investment Decision (“FID”), including an
Optimized Feasibility Study for the Project (“Optimized
FS”) and operating the Company’s demonstration plant
(“Demonstration Plant”) which will produce
battery-grade manganese (“HPMSM”) for
qualification testing by potential customers.
-
Giyani and its wholly owned subsidiaries have secured US$16 million
via long-term convertible loan facilities with the IDC, which will
enable Giyani to progress to FID, while minimising shareholder
dilution at this time.
-
The IDC1 is a major South African development financing institution
with over 80 years of experience investing in industrial companies
and the mining sector, with US$8.5 billion of assets and who
typically invests over US$1.0 billion each year in mining and
infrastructure related projects.
-
The remaining US$10 million of funding is in the process of being
secured from a strategic investor who has signed a non-binding term
sheet, completed its due diligence and is currently in the final
documentation stage.
Danny Keating,
President and CEO of the Company, commented:
“We are delighted to announce the IDC funding as
a resounding vote of confidence in K.Hill. This brings on board a
strategic partner with significant mining and industrial
development experience. The investment provides the majority of the
financing that Giyani requires to de-risk the Project through to
FID and introduces a partner with a vision and ambition to be
involved in the development and capital funding of the Project.
The demand for HPMSM projects with robust
economics has never been stronger as financial institutions begin
to understand the enormous demand for this critical mineral as the
world moves definitively towards electric vehicles. We look forward
to commencing operations at the Demonstration Plant to enable the
distribution of samples to potential customers as we finalize our
sales and off-taker strategy for the commercial scale plant to be
built in Botswana.”
Joanne Bate, Chief Operations Officer of
IDC, commented:
“The IDC has developed a value chain strategy
which focuses not only on the new minerals critical for net zero,
but also on their processing towards precursor materials, through
conversion into cell manufacturing, battery development, assembly
and recycling.
We are excited by the potential of Giyani and
see K.Hill as an important step in IDC’s strategy to help initiate
the development of a battery minerals industry in Southern
Africa.”
Figure 1: Simplified Giyani Metals Corporate
Structure
Summary of Key Terms of IDC
Facility
- The US$16
million IDC Facility (the “IDC Facility”) will be
split into two separate facilities with similar terms attached. A
US$12.5 million convertible loan facility for use by Giyani Metals
South Africa Proprietary Limited (“GMSA”) and a
US$3.5 million convertible loan facility for use by Menzi Battery
Metals (Proprietary) Limited (“Menzi”), both
wholly owned subsidiaries of the Company, (together, the
"IDC Facility"). Both will be provided in South
African Rand (“ZAR”) equivalent up to a maximum of
ZAR 300,000,000.
-
The IDC Facility may be drawn down in tranches by Giyani’s local
subsidiaries in South Africa (GMSA) and Botswana (Menzi) to
complete the final stages of construction and commissioning of the
Demonstration Plant, and importantly, fund the operational phase to
produce final product for off-taker testing and potential
customers. Alongside this, the Optimized FS will be prepared,
building on both the Feasibility Study completed in 2022 and the
recently released 2023 Preliminary Economic Assessment
("PEA") (see Giyani news release dated July
31, 2023) to define the final construction economics and enable
FID.
-
Interest will accrue in ZAR on drawn amounts on a daily basis from
the relevant drawdown date, compounded monthly in arrears at the
South African Prime Rate (currently 11.75%) plus 3%. The equivalent
rate in US Dollar terms can be calculated using the USD/ZAR
exchange rate.
-
The Company will be able to draw down the funds until March 31,
2025, with any portions of the IDC Facility that have not been
drawn down at that time being cancelled without penalty.
-
The final repayment date of the IDC Facility, if not converted,
will be 48 months from the first draw down date.
-
Certain criteria are attached to the IDC Facility including (i)
completion of the construction and commissioning of the
Demonstration Plant by the first anniversary of the first drawdown
date, provided that this date may be extended to no later than June
30, 2025, subject to Giyani demonstrating that it has secured
sufficient Project development funding to achieve FID; and (ii)
completion of the Optimized FS within 90 days after construction
and commissioning of the Demonstration Plant has been completed and
is producing HPMSM within defined specifications.
-
The IDC has the option to convert the outstanding amount of the IDC
Facility into shares (and shareholder loans) in Thabatala Holding
(Proprietary) Ltd ("Project HoldCo") or shares in
Giyani (the "Giyani Shares"). The option is
exercisable by the IDC on two occasions, the first being after
completion of the Optimized FS and successful operation of the
Demonstration Plant, and the second being after Giyani has achieved
FID. The conversion will occur at a 20% discount to the then
prevailing 30-day volume weighted average price of the Giyani
Shares, subject to a minimum share price equal to the closing price
of the Giyani Shares on the trading day immediately prior to this
announcement (the "Minimum Share Price"). The
percentage shareholding acquired by the IDC following conversion
will be limited to a maximum shareholding of 19.9%, or such higher
percentage as may be approved by the TSX Venture Exchange (the
"TSXV"), Giyani and its shareholders (the
“Maximum Shareholding Percentage”).
- If the IDC elects
to convert the outstanding amount of the IDC Facility into shares
(and shareholder loans) in Project HoldCo, then the IDC will have a
further option, exercisable upon the Project achieving sustained
commercial production, to exchange its shares and shareholder loans
in Project HoldCo for Giyani Shares. The conversion will occur at
the then prevailing 30-day volume weighted average price of Giyani
Shares, subject to the Minimum Share Price and the Maximum
Shareholding Percentage.
-
The IDC Facility will be comprehensively secured in favour of the
IDC through a guarantee given by Giyani and each of the
subsidiaries associated with the Project in favour of the IDC,
along with pledges of their respective shares and loan accounts,
and security granted by Menzi, GMSA and Thabatala Technology
Company (Proprietary) Ltd over the K.Hill assets.
-
If the IDC elects to exercise its option(s) and acquire shares in
either Giyani or Project HoldCo then: (i) for so long as the IDC
holds at least 10% of the outstanding Giyani Shares or the Project
HoldCo shares, the IDC will be entitled to nominate one person for
appointment to the board of Giyani or Project HoldCo, as the case
may be, and shall be entitled to nominate one additional person to
the relevant board for so long as it holds an additional 15% of the
outstanding Giyani Shares or the Project HoldCo shares; (ii) for so
long as the IDC holds at least 10% of the outstanding Giyani
Shares, the IDC will be entitled to direct the sale of up to 10% of
HPMSM production from the Project to a nominated off-taker in the
Southern African Development Community, on terms no less favourable
than any other off-take agreement negotiated by Giyani; and (iii)
for so long as the IDC holds at least 10% of the outstanding Giyani
Shares, the IDC will have a right of first refusal to provide and
act as co-lead arranger for the project finance facilities sought
by Giyani for the development of the Project, provided that the
terms of such facility(s) and arrangements shall not be less
favourable than those available to Giyani on the open market.
-
The IDC Facility is subject to various drawdown conditions,
including Giyani securing the remaining US$10 million of financing
to be fully funded to FID, as well as other conditions customary
for facilities of this nature.
-
The IDC Facility otherwise contains such undertakings, warranties
and terms and conditions as would be standard and customary in
funding arrangements of this nature.
The IDC Facility and the Giyani Shares issuable
on conversion remain subject to receipt of the requisite TSXV
approval(s).
This foregoing summary of key terms of the IDC
Facility as signed on November 29, 2023 is qualified in its
entirety by the full text of the IDC Facility, copies of which have
been or will be filed under the Company's profile on SEDAR+ at
www.sedarplus.com. Capitalized terms used but otherwise not defined
in this foregoing summary shall have the meanings given to them in
the IDC Facility.
Summary of US$10 million Funding
Terms
In parallel with finalizing and signing the IDC
Facility, the Company has engaged with a strategic investor to
secure the remaining US$10 million of financing, which process is
now post due diligence and is in the final documentation stage,
following signing of a non-binding term sheet on July 21, 2023. In
terms of this financing arrangement, the Company will raise at
least US$10 million, which may be split between a royalty and an
equity component, which will satisfy the relevant draw-down
conditions to the IDC Facility. The equity component of such
financing, which is subject to a maximum shareholding in Giyani of
19.9%, is expected to be completed through the issuance of units at
a price of C$0.15 per unit, with each unit consisting of one Giyani
Share and one common share purchase warrant (each, a
"Warrant"), where each Warrant entitles the holder
thereof to acquire one additional Giyani Share at a price of
C$0.226 per Giyani Share exercisable for a period of five years
from its date of issue. Complete details of this additional
financing will be included in a further news release once the
definitive documentation has been finalized and signed. This
financing arrangement remains subject to receipt of the requisite
TSXV approval(s).
Project Execution and Optimized
Feasibility Study
The Company is now progressing critical
workstreams to move K.Hill to FID. These major workstreams include,
but are not limited to the following:
-
Advancing discussions with the multiple Tier-1 off-takers who have
expressed interest in bringing K.Hill into their battery raw
material supply chains, a number of whom have already visited
Giyani’s facilities.
-
Completing construction, commissioning and entering the operational
phase of the Demonstration Plant in Johannesburg. The IDC Facility
has been secured in ZAR which is aligned with the Company’s foreign
exchange exposure as the Demonstration Plant will be constructed
and operated using South African contractors. The Demonstration
Plant will be used for a number of different purposes, all of which
will be critical in preparing the Company for the commercial
project construction stage:
-
The plant will be capable of producing up to 600 kg per day of dry
HPMSM crystals for shipment to off-takers for product qualification
and negotiation of sales contracts, starting mid-2024;
-
Provie to financial institutions and off-take partners that the
product can be produced using the Giyani flowsheet on a consistent
basis;
-
Give greater understanding of the operating costs, especially
reagent consumption, at a significant scale;
-
Training of staff including personnel recruited from Botswana who
can gain technical and operational skills prior to the construction
and operation of the commercial plant which will help to minimise
the ramp-up period.
-
Completion of an Optimized FS based on the updated Mineral Resource
Estimate (“MRE”) and PEA from July 2023 for
K.Hill, and utilising data and learnings from the operation of the
Demonstration Plant, that will meet the requirements of project
finance banks and lenders. It is also anticipated that the contract
for the Optimized FS will be ZAR denominated to align with the IDC
Facility.
About Giyani
Giyani’s mission is to become a sustainable,
low-carbon producer of battery materials for the electric vehicle
(“EV”) industry. The Company has developed a
hydrometallurgical process to produce high-purity manganese
sulphate monohydrate, a lithium-ion battery cathode precursor
material critical for EVs, directly from ore from its manganese
oxide deposits in Botswana, wholly owned by its Botswana subsidiary
Menzi. The Company’s assets include K.Hill and the Otse and Lobatse
manganese prospects, each of which has seen historical mining
activities.
Additional information and corporate documents
may be found on www.sedarplus.com and on Giyani Metals Corp.
website at https://giyanimetals.com/.
Qualified Persons / NI 43-101
Disclosures
An NI 43-101 technical report including results
of the PEA and the MRE can be found on SEDAR+ at www.sedarplus.ca
and made available on the Company’s website at
www.giyanimetals.com.
Mr. Jacques du Toit CEng. PrEng. MscEng. PMP is
a qualified person, as defined by National Instrument (“NI”)
43-101. Mr. du Toit is the VP, Technical Services and has reviewed
and approved the scientific and technical content contained in this
news release but is not independent for the purposes of NI
43-101.
Mr. Luhann Theron,
MSc., Pr.Sci.Nat. 400184/15, of Lambda Tau is registered with the
SACNASP and last visited the K.Hill Project site in August 2023 and
is a QP, as defined by NI 43-101. Mr. Theron is the Chief Geologist
for the Company and has reviewed and approved the scientific and
technical content contained in this news release but is not
independent for the purposes of NI 43-101.
On behalf of the Board of Directors of Giyani
Metals Corp.
Danny Keating, President and CEO
Contact:
Danny KeatingPresident
& Chief Executive Officer dkeating@giyanimetals.com
Charles FitzRoyHead of
Corporate Development & Strategycfitzroy@giyanimetals.com
Neither the TSX Venture Exchange (the "TSXV")
nor its Regulation Services Provider (as that term is defined in
the policies of the TSXV) accepts responsibility for the adequacy
or accuracy of this news release.
The securities described herein have not been
registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), or any state securities laws,
and accordingly, may not be offered or sold to, or for the account
or benefit of, persons in the United States or "U.S. persons," as
such term is defined in Regulation S promulgated under the U.S.
Securities Act ("U.S. Persons"), except in compliance with the
registration requirements of the U.S. Securities Act and applicable
state securities requirements or pursuant to exemptions therefrom.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the Company's securities to,
or for the account of benefit of, persons in the United States or
U.S. Persons.
Forward Looking Information
This news release contains "forward-looking
information" within the meaning of applicable Canadian securities
legislation. All statements in this news release, other than
statements of historical fact, that address events or developments
that Giyani expects to occur, are "forward-looking statements".
Forward-looking statements are statements that are not historical
facts and are generally, but not always, identified by the words
"expects", "does not expect", "plans", "anticipates", "does not
anticipate", "believes", "intends", "estimates", "projects",
"potential", "scheduled", "forecast", "budget" and similar
expressions, or that events or conditions "will", "would", "may",
"could", "should" or "might" occur.
Such statements include without limitation: the
IDC Facility, drawdown of funds under the IDC Facility and the
Company meeting the conditions precedent related thereto, the
development of K.Hill to FID or generally, the timing of the
construction and commissioning of the Demonstration Plant,
completion of the OFS, various factors related to the operation of
the Demonstration Plant, the timing and terms of conversion of the
IDC Facility into Giyani Shares or Project HoldCo shares and
shareholders loans, the securitization of the IDC Facility, the
appointments to the board of directors of Giyani or Project HoldCo,
receipt of TSXV approval for the transactions contemplated in
this news release, the terms and conditions of the additional
US$10m financing, completion of such US$10m financing on the terms
described herein or otherwise, and discussions with Tier-1
off-takers.
All such forward-looking statements are based on
the opinions and estimates of the relevant management as of the
date such statements are made and are subject to certain
assumptions, important risk factors and uncertainties, many of
which are beyond Giyani's ability to control or predict.
Forward-looking statements are necessarily based on estimates and
assumptions that are inherently subject to known and unknown risks,
uncertainties and other factors that may cause actual results,
level of activity, performance or achievements to be materially
different from those expressed or implied by such forward-looking
statements. In the case of Giyani, these facts include their
anticipated operations in future periods, planned exploration and
development of its properties, and plans related to its business
and other matters that may occur in the future. This information
relates to analyses and other information that is based on
expectations of future performance and planned work programs.
Forward-looking information is subject to a
variety of known and unknown risks, uncertainties and other factors
which could cause actual events or results to differ from those
expressed or implied by the forward-looking information, including,
without limitation: inherent exploration hazards and risks; risks
related to exploration and development of natural resource
properties; uncertainty in Giyani's ability to obtain funding;
commodity price fluctuations; recent market events and conditions;
risks related to the uncertainty of mineral resource calculations
and the inclusion of inferred mineral resources in economic
estimation; risks related to governmental regulations; risks
related to obtaining necessary licenses and permits; risks related
to their business being subject to environmental laws and
regulations; risks related to their mineral properties being
subject to prior unregistered agreements, transfers, or claims and
other defects in title; risks relating to competition from larger
companies with greater financial and technical resources; risks
relating to the inability to meet financial obligations under
agreements to which they are a party; ability to recruit and retain
qualified personnel; and risks related to their directors and
officers becoming associated with other natural resource companies
which may give rise to conflicts of interests. This list is not
exhaustive of the factors that may affect Giyani's forward-looking
information. Should one or more of these risks and uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in the
forward-looking information or statements.
Giyani's forward-looking information is based on
the reasonable beliefs, expectations and opinions of their
respective management on the date the statements are made, and
Giyani does not assume any obligation to update forward looking
information if circumstances or management's beliefs, expectations
or opinions change, except as required by law. For the reasons set
forth above, investors should not place undue reliance on
forward-looking information. For a complete discussion with respect
to Giyani and risks associated with forward-looking information and
forward-looking statements, please refer to Giyani's Annual
Information Form, all of which are filed on SEDAR+ at
www.sedarplus.com.
___________________________________
1 https://www.idc.co.za/
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/da5bfcca-af7b-4787-b18d-6eae21686c8a
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