Completion Of The ZG Group Transaction Following Execution Of New Convertible Securities Facility

  • Volt has successfully completed the acquisition of a 70% controlling interest  in the ZG Group to become a graphite producer in Europe.
  • New US$4.0 million convertible security entered into with SBC Global  Investment Fund and drawn down in full to fund ZG Group US$3.8 million  completion payment.  
  • Agreement reached with ZG Group vendors to defer the final US$3.8 million  payment from 6 months to 12 months after completion. 
  • Previously announced US$8.5 million loan agreement with JES Green  Investments Ltd terminated.

Volt Resources Limited, Votl, ZG Group, Graphite Production, Graphite Explorer, Gold Explorer

Graphite and gold explorer and developer Volt Resources Limited (ASX: VRC) (“Volt” or the “Company”) is pleased to advise that it has completed the acquisition of a controlling 70% interest in  the Zavalievsky group of companies (the ZG Group). 

The completion of the acquisition immediately transforms Volt into one of the few ASX-listed graphite  producers. The Zavalievsky mine and processing facilities are located adjacent to the town of Zavally,  approximately 280 kilometres south of the Ukraine capital of Kyiv and 230 kilometres north of the  main port of Odessa. 

The ZG Group has current plans to install a processing plant and equipment in order to commence  producing spheronised purified graphite (SPG) for the European LIB anode market within the next 12  months. The Zavalievsky mine’s strategic location for the future supply of SPG to the European market  has already attracted interest from LIB cell manufacturers and major car makers.

Volt’s Managing Director, Trevor Matthews, commented “The acquisition of a controlling interest in  the ZG Group positions Volt years ahead of its peer graphite companies without the usual  development risks associated with a greenfield project. 

Volt now has the potential to become a key market participant in the supply of graphite and battery  anode materials into the growing European market with excellent access to other markets in the USA  and the Middle East.” 

Completion of the ZG Group acquisition was funded from proceeds received from a US$4 million  convertible securities agreement entered into with SBC Global Investment Fund, an investment fund  associated with SBC Global Investors (New Facility). SBC Global Investors seeks to make non-control  direct investments in growth companies following a detailed assessment of the company’s assets,  management quality, industry structure and operating trends. A summary of the key terms of the New  Facility is set out in Annexure A. 

The issue of securities pursuant to the terms of the New Facility was within Volt’s existing capacity  pursuant to ASX Listing Rule 7.1. An Appendix 3B in relation to the New Facility has been lodged today. 

EAS Advisors, LLC, acting through Odeon Capital Group LLC, member of FINRA/SIPC/MSRB/NFA, acted  as the Company’s advisor for the funding.  

To assist Volt to complete the ZG Group acquisition, the vendors have agreed to defer the second and  final instalment of the purchase price (being an amount of US$3.8 million) until the date that is 12  months after completion (as opposed to 6 months as originally agreed). Accordingly, the second  instalment of the purchase price will become payable in July 2022. Volt has already paid the vendors of  the ZG Group the first instalment of the purchase price of US$3.8 million, comprising an advance of  US$150,000 with the balance of US$3.65 million paid on completion of the ZG Group acquisition. 

Volt had previously intended to complete the ZG Group acquisition using funds that it sought to draw  down under a US$8.5 million loan facility entered into with European investment company JES Green  Investments Ltd. Unfortunately, JES Green Investments Ltd defaulted on the provision of funding  under that loan agreement requiring Volt to source new funding in order to complete the ZG Group  acquisition. Volt has now terminated the loan agreement and reserved its rights as a consequence of  JES Green Investments Ltd not meeting its obligations under the loan agreement.