TIDMTGR
RNS Number : 8155I
Tirupati Graphite PLC
17 August 2021
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 which is
part of UK law by virtue of the European Union (Withdrawal) Act
2018. Upon the publication of this announcement this information is
considered to be in the public domain.
17 August 2021
Tirupati Graphite plc ('Tirupati' or the 'Company')
Tirupati to Acquire Strategic Mozambique Graphite Projects from
ASX Listed Battery Minerals
Tirupati Graphite plc, the fully integrated, revenue generating,
specialist graphite producer and graphene and advanced materials
developer, is pleased to announce that it has entered into a
binding acquisition agreement for the acquisition of the entire
issued share capital of Suni Resources SA ("Suni Resources") (the
"Acquisition"). Suni Resources holds the Mozambique portfolio of
graphite assets of ASX listed Battery Minerals Limited ("Battery
Minerals"), which includes the construction initiated Montepuez
Graphite Project ('Montepuez" or the "Montepuez Project") and the
advanced feasibility study stage Balama Central Graphite Project
("Balama Central" or the "Balama Central Project"). The Acquisition
includes all associated assets, infrastructure, permits, licenses
and intellectual property on both projects for a total
consideration of AU$12.5 million (circa GBP6.6 million) in a cash
and shares deal. The Acquisition is subject, amongst other things,
to the mandatory shareholder approval of Battery Minerals and
approval of the transaction by the Ministry of Mineral Resources
and Energy in Mozambique.
Mozambique is home to commercially significant deposits of
graphite and a key determinant of mining opportunities in
Mozambique is the global energy transition, which has driven demand
for certain minerals needed to fuel electric vehicles and vehicles
that rely on hydrogen fuel cells. Mozambique is well-positioned to
take advantage of this market boom, with mining operations already
expanding across Cabo Delgado where the projects are located as
well as Gaza, Manica, Maputo, Nampula, Niassa, Tete and
Zambezia.
Click on, or paste the following link into your web browser, to
view the associated PDF document with pictures included:
http://www.rns-pdf.londonstockexchange.com/rns/8155I_1-2021-8-16.pdf
Overview
-- The projects are being acquired from ASX listed Battery Minerals;
-- The Acquisition is in line with the Company's stated strategy
of diversifying its resource base and mitigating country risk;
-- Two complementary world-class graphite deposits, spread over
a combined 18,500 hectares permit area adding mineral resources of
over 152 million tonnes at 8.5% TGC, significantly increasing the
Company's JORC Code (2012) mineral resource base;
-- Extensive pre-development work and a Definitive Feasibility
Study ("DFS") has been conducted by Battery Minerals on the
Montepuez project, resulting in a development plan for a 100,000
tonnes annual graphite concentrate capacity in two equal
stages;
-- Construction was initiated at the Montepuez project for a
first stage 50,000 tpa flake graphite project with c. 100 person
base camp, plant area grading and tailing dam construction
substantially completed and certain long lead equipment including
crusher unit ordered for the development of the project;
-- The projects graphite product basket is a mix of jumbo, large
and small flake, complementing Tirupati's existing mix of
predominantly jumbo and large flake graphite products from
Madagascar;
-- Upon completion, the Company intends to further optimise the
project development plans leveraging application of its extensive
and proven expertise in developing graphite projects to minimise
investment and optimise operating costs while looking to retain the
plans to implement 2 x 50,000 tpa modules plan owing to visible
market opportunities in the green economy; and
-- Solidifies the Company's divisional structure of primary
mining and processing projects in Madagascar, Sahamamy and
Vatomina, and speciality graphite and graphene processing
businesses in India.
Transaction Rationale
-- Montepuez is an in-construction high grade flake graphite
project while Balama Central is an advanced stage feasibility ready
project located in an established graphite producing district of
Mozambique;
-- The Acquisition provides resource diversity to support the
Company's strategy of being a global leader in flake graphite,
adding substantial JORC Code (2012) resources and reserves to
complement its existing resources of high-quality large flake
graphite in Madagascar;
-- The additional mineral resources and reserves lay the
foundation for the Company to capitalise on the visible market
opportunities emanating from the growth of e-mobility and energy
storage, fire safety, thermal management, advanced materials and
composites;
-- The Acquisition will enable the Company to achieve its stated
strategy of diversifying country risk with a second primary
resource location and provide advantages of higher-grade deposits
with c.9-10% TGC;
-- The c.60-70% medium and small flake graphite anticipated from
the projects, which are preferred by certain end users in the
lithium-ion battery anode and are a feed stock for micronized
graphite, enable the Company to prioritise its premium jumbo and
large flake Madagascan resources to premium markets for these
products and applications.
Key Transaction Terms
-- Subject to the satisfaction of the conditions to the
transaction, the Company will acquire from Battery Minerals 100% of
the issued share capital of Suni Resources (a Mozambique
incorporated subsidiary of Battery Minerals), all related
intellectual property relating to the Montepuez Project and Balama
Central Project, and will be assigned the shareholder loans owed by
Suni Resources to certain Battery Minerals group companies
amounting to c.AU$29 million for a total aggregate consideration of
AU$12.5 million;
-- Of the agreed consideration, AU$1.5 million (c.GBP0.8
million) shall be settled in cash at completion;
-- The balance of AU$11 million (c.GBP5.8 million) shall be
settled by the issue of 5,667,288 ordinary shares in the Company
("TG Shares") at an issue price of GBP1.03 per share, being a 10%
discount to the 5-day VWAP prior to the date of entry into the
acquisition agreement in two equal tranches, the first 2,833,644 TG
Shares to be issued on completion of the Acquisition and the second
2,833,644 TG Shares to be issued eight months after the completion
date;
-- 50% of the TG Shares will be subject to a lock-in for 8 months post completion;
-- 50% of the TG Shares will be subject to a lock-in for 20 months post completion;
-- Accrued VAT Refunds to the date of completion claimed in
Mozambique shall remain to Battery Minerals;
-- Completion of the transaction is subject to certain conditions precedent, including:
o Mozambique governmental approvals for the transfer of the
shares held by Battery Minerals' subsidiary Rovuma Resources
Limited in Suni Resources and the overall transaction, including
the approval of the Ministry of Mineral Resources and Energy;
and
o Battery Minerals shareholder approval for the transaction.
-- The parties have agreed to best efforts for satisfaction of
the conditions precedent and it is expected that the satisfaction
of the conditions can be secured by end of November 2021, although
there is no guarantee that these will occur;
-- The conditions precedent must be satisfied prior to 29 April
2022 ("Longstop Date") or as may be agreed by the parties in
writing;
-- The acquisition agreement may be terminated prior to
completion by either party if the conditions precedent are not
satisfied prior to the Longstop Date, if there is a material breach
of the agreement by the other party or by the Company, if the
licences relating to the Montepuez and Balama Central Graphite
Projects are terminated or adversely varied, or if a material
adverse change occurs in respect of Suni Resources prior to
completion;
-- The acquisition agreement is otherwise subject to customary
terms and conditions for a transaction of this nature, including
pre-completion obligations, warranties and indemnities provided by
the parties.
Shishir Poddar, CEO of Tirupati Graphite, said: "With fast
evolving opportunities as the electrification of mobility has taken
off, and the world is starting its scramble for supplies of
critical raw materials of which graphite is one, this is nothing
short of a game-changing acquisition for us to build our arsenal
and seize every opportunity coming our way to becoming a global
leader in flake graphite. Strategically, the Montepuez and Balama
Central deposits are world class and will add 152 million metric
tonnes at 8.5% TGC of resources to our existing c.25 million tonnes
of resources in Madagascar, a c.6X addition on in ground resource
tonnage with a c.12X addition on the contained graphite.
"Every forecast of flake graphite market we have come across
rate the market size exceeding 5 million tonnes per annum of new
demand by 2030, which dwarfs our current buildout to 84,000 tpa
capacity planned at our Madagascan projects. With this acquisition,
we take significant leap forward our mission of becoming a leader
to meet the global needs for this critical material and
contributing to the green aspirations of the world.
"A recent UN report depicts the threat we all face with climate
risks and every effort towards its mitigation is an opportunity. We
will continue to be pragmatic in our approach to developing
additional capacities which are well planned and aligned with the
graphite markets. Utilising the strengths and advantages of these
projects, which are highly complementary to our resource
requirements, will help us to mitigate the country risks through
diversification whilst further bolstering the foundations which
will enable us to capitalise on every opportunity to grow beyond
our medium-term development plans ("MTDP").
"With much of the consideration being satisfied in equity, we
will welcome our new shareholders from Battery Minerals. Continuing
with the construction of the Montepuez Project will be a key focus
and with our expertise and history in working similar deposits over
decades, we are confident it will result in even better economics
for Montepuez and Balama Central, which we have already started
working on and will keep the markets updated as we progress."
David Flanagan, Executive Chairman of Battery Minerals said ,
"Shishir and his team at Tirupati have developed and demonstrated
world leading graphite industry capability over the last 40 years.
They are uniquely positioned with existing operations and
downstream processing facilities that are globally competitive
making them an excellent partner to commence these projects in the
shortest possible time for the greatest benefit of the respective
companies, shareholders and the people of Mozambique. "
DETAILS
Background
Tirupati continues to advance its operations across its
portfolio including primary mining and processing projects in
Madagascar, Sahamamy and Vatomina, and speciality graphite and
graphene processing businesses in India.
Currently, the global production of graphite and spherical
graphite is dominated by China, which uses hydrofluoric acid
purification techniques to produce purified spherical graphite.
Given the transition of the world to a clean, green energy
platform, many lithium-ion batteries ('LiB') manufacturers are
actively seeking alternative supply options. With this background,
interest in Tirupati's products have escalated. As recently
announced (see RNS dated 5 July 2021), the Company is now working
with Hanwa, a world-leading Japanese trading company, which has
already built significant interest for Tirupati's suite of graphite
products in markets across Asia.
Accordingly, as a fully integrated business, the Company is
focused on ramping up activities at its primary graphite mining and
processing operations as it looks to build its position as a key
supplier of high-value flake graphite. Commissioning at the first
9,000tpa module of its second project, Vatomina, is almost
complete, which will lift primary flake graphite capacity in
Madagascar to 12,000tpa output ahead of increasing total capacity
to 84,000tpa by 2024 under the Company's MTDP.
To complement its two primary graphite projects in Madagascar,
the Company has entered into a binding acquisition agreement for
the acquisition of the entire issued share capital of Suni
Resources which holds the Mozambique portfolio of graphite assets
of ASX listed Battery Minerals, which includes the construction
initiated Montepuez Project and the advanced feasibility study
stage Balama Central Project including all associated assets,
infrastructure, permits, licenses and intellectual property on both
projects for a total consideration of AU$12.5 million (circa GBP6.6
million) in a cash and shares transaction.
Flake graphite is a critical resource, which is used in over 150
applications. As well as purity, flake size is one of the main
variables determining the product type and end application of flake
graphite. For example, jumbo flakes are most suited for use in
expandable graphite products, while small flakes are preferred for
spherical graphite used in the anode of LiB.
At Sahamamy and Vatomina, the Company produces high-quality
flake graphite concentrate with up to 96% purity with a
predominance of jumbo and large sized flakes; the flake-size
distribution mix is circa 80% jumbo and large flake, and 20% small
flakes. Notably, the flake sizes at Montepuez and Balama Central
are predominantly small flake with the mix being circa 60%-70%
small flake and 30%-40% coarser flake. This is key as test works to
date has confirmed that the size and quality of the natural flake
graphite from these projects is ideally suitable for LiB.
Tirupati's demonstrated low operating costs in Madagascar is
primarily due to the large flake particle size distribution, which
means that liberation of the graphite is easier, translating to
leaner processing circuit. While more crushing facilities will be
needed at the new projects in Mozambique, these projects have the
advantage of being higher grade deposits and therefore, it is
anticipated that low operating costs will also be maintained as
they will be able to produce larger quantities of graphite from
lesser material through the processing circuit.
Looking ahead, it is anticipated that the Company will modify
the existing mine plans at both projects, utilising its own clean
processing techniques; further details will be provided at a later
date.
Group Mineral Resources & Ore Reserves Statement [1]
Montepuez Project
Montepuez is an in-construction high-grade graphite project with
a Mining Licence and Environmental Permits in place. The Montepuez
Project is underpinned by its high quality and strategically large
resources and reserves from its two key targets, Buffalo and
Elephant which contain mineral resources of 119.6 million tonnes at
8.1% total graphite content ('TGC') and ore reserves of 42.2
million metric tonnes at 9.27% TGC.
The Ore Reserve estimate of Montepuez is summarised in the table
below.
Deposit Ore type Class Ore (Mt) TGC (%)
Weathered Probable 3.58 8.31
Fresh Probable 16.80 10.06
---------- ------------------- -------- -------
Buffalo Subtotal Probable 20.38 9.75
---------- --------- -------- -------
Weathered Probable 2.41 8.39
Fresh Probable 19.41 8.87
---------- ------------------- -------- -------
Elephant Subtotal Probable 21.82 8.82
---------- --------- -------- -------
Weathered Probable 5.98 8.34
Fresh Probable 36.21 9.42
---------- ------------------- -------- -------
TOTAL TOTAL Probable 42.19 9.27
---------- --------- -------- -------
The life of mine (LOM) flake graphite concentrate sizing is
summarised below:
Montepuez - LOM Flake Graphite Concentrate
Sizing
Flake size Flake size Flake size % of concentrate TGC
(mesh) (micron) grade
----------- ---------- --------------------- ------
Fine -100 Mesh 0 - 150 57.1% 96%
----------- ---------- --------------------- ------
Medium +100 Mesh +150 -180 11.3% 96%
----------- ---------- --------------------- ------
Large +80 Mesh +180 -300 20.7% 96%
----------- ---------- --------------------- ------
Jumbo +50 Mesh +300 11.0% 96%
----------- ---------- --------------------- ------
Montepuez - Average Product Flake Size Classification
Weathered Fresh
----------------- ----------------
Sieve Size (um) % in Interval % in Interval
----------------- ----------------
>300 5.9 11.6
----------------- ----------------
180 3.5 22.5
----------------- ----------------
150 13.6 11.0
----------------- ----------------
-150 77.0 54.9
----------------- ----------------
A DFS completed by Battery Minerals which was upgraded in
October 2018, confirmed robust project economics and strong returns
over a 30-year mine life from a 50,000tpa operation under the
proposed development plans. This equated to some 4.8Mtpa of
production over the first 10 years.
Tirupati has already started the process to reviewing its
development options for Montepuez to integrate the project into its
existing production profile and maximise the value of the project
in the short to medium term.
Balama Central (10031C)
The Balama Central Graphite Project is located approximately
260km east of Pemba, along the Pemba - Montepuez - Balama public
road, within the same region as Montepuez and other graphite
producers in Mozambique. The two main graphite ore bodies, Lennox
and Byron, have mineral resources of 32.9Mt at a grade of 10.2%
TGC. The maiden Balama Central Graphite Project ore reserve is
defined in the table below:
Balama Central Graphite Project Ore Reserve
Ore Type Class Ore (Mt) TGC (%)
---------------- --------------- -------------
Weathered Probable 5.44 10.74
---------------- --------------- -------------
Primary Probable 14.21 11.19
---------------- --------------- -------------
Total Probable 19.66 11.06
---------------- --------------- -------------
The defined solution for the Balama Central Graphite Project
Feasibility Study by Battery Minerals in 2018 consists of a 480,000
tpa plant feed at 12.5% TGC mining operation, producing
approximately 58,000 tpa of 96% TGC graphite flake concentrate,
with a 42-year life of operation. Balama Central still requires a
mining license, environmental and other approvals which will be
obtained by Tirupati in the ordinary course of business as the
project is developed further.
** ENDS **
For further information, please visit
https://www.tirupatigraphite.co.uk/ or contact:
Tirupati Graphite Plc
Puruvi Poddar +44 (0) 20 3984 9894
Optiva Securities Limited (Broker)
Daniel Ingram +44 (0) 20 3137 1902
---------------------
St Brides Partners Ltd (Financial PR)
Isabel de Salis +44 (0) 20 236 1177
---------------------
Notes
Tirupati Graphite Plc is a revenue-generating, multi-asset,
multi-jurisdictional, fully integrated producer and developer of
high-grade natural flake graphite, speciality graphite and graphene
and graphene enhanced advanced materials. With a unique set of
properties, graphite has diverse applications with multiple growth
streams and graphene forms the new generation of 2D and advanced
materials. The Company places a special emphasis on "green"
applications, including renewable energy and energy efficiency,
energy storage, thermal management, and advanced materials
development, and is committed to ensuring its operations are
sustainable as well.
The Company's operations include primary mining and processing
in Madagascar, where the Company operates two key projects,
Sahamamy and Vatomina; 3,000 tpa of high-quality flake graphite
concentrate with up to 96% purity is currently being produced and
sold to customers globally, additional 9,000 tpa capacity expected
to be commissioned in July 2021, and this is planned to increase to
84,000 tpa by 2024 as per the Company's modular medium-term
development plan.
In India, through Tirupati Speciality Graphite Private Limited
('TSG'), with whom the Company has a binding acquisition agreement
subject to regulatory approvals, Tirupati is developing a suite of
speciality graphite for use in hi-tech applications like
lithium-ion batteries, fire retardants, thermal management, and
composites. Its current operations include the 1,200 tpa Patalganga
Project, which was commissioned in July 2019 to manufacture and
sell CARBOFLAMEX(R), a trademarked fire-retardant expandable
graphite product. TSG is further developing 30,000 tpa specialty
graphite project in two 15,000 tpa modules which will include
capabilities to manufacture high-purity, expandable, micronized and
spherical graphite and using its unique green processing
technologies for the manufacturing of these advanced materials.
TSG has also established and continues to develop the Tirupati
Graphene and Mintech Research Centre, a state-of-the-art R&D
centre focussed on manufacturing graphene, developing its
applications and advanced materials using graphene, and further
providing environmentally friendly technologies consultancy for
mineral processing.
[1] Battery Minerals Group Mineral Resource. Estimate
("MRE")
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
ACQMZGMRRVMGMZM
(END) Dow Jones Newswires
August 17, 2021 02:00 ET (06:00 GMT)
Tirupati Graphite (LSE:TGR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Tirupati Graphite (LSE:TGR)
Historical Stock Chart
From Jul 2023 to Jul 2024