Sarytogan Graphite Secures A$5M Investment from EBRD for Project Development
SARYTOGAN GRAPHITE LIMITED (SGA) Share Update August 2024 Thursday 8th
Sarytogan Graphite Secures A$5M Investment from EBRD
Sarytogan Graphite Limited (ASX: SGA) has entered into a share subscription agreement with the European Bank for Reconstruction and Development (EBRD) for a placement of A$5M to advance its graphite project in Kazakhstan.
Instant Summary:
- EBRD to invest A$5M in Sarytogan Graphite Limited.
- Investment split into two tranches, with the first tranche raising $2.64M.
- EBRD to hold a 17.36% share in Sarytogan post-investment.
- Funds to be used for the progression of the Sarytogan Graphite Project and corporate overheads.
- EBRD to nominate a director to the Sarytogan Board upon completion of the second tranche.
Investment Details
Sarytogan Graphite Limited has successfully secured a significant investment from the European Bank for Reconstruction and Development (EBRD). The A$5M investment will be used to further develop the Sarytogan Graphite Project in Kazakhstan.
The investment will be made in two tranches. Tranche 1 involves the issuance of 16,507,565 shares at 16c each, raising $2,641,210 and representing 9.99% of Sarytogan's issued capital. The completion of Tranche 1 is subject to consent from the Kazakh Competent Authority and other customary conditions.
Tranche 2 will cover the remaining investment amount, involving the issuance of 14,742,435 shares at 16c each. This tranche will bring EBRD's total shareholding in Sarytogan to 17.36%. Additional conditions for Tranche 2 include approval from the Australian Foreign Investment Board.
Strategic Alignment
EBRD's investment follows extensive technical and legal due diligence, highlighting the project's potential and the company's governance standards. Sarytogan's Managing Director, Sean Gregory, expressed delight at attracting such a reputable investor, noting the shared strategic objectives of promoting the green economy and high governance standards.
EBRD's Director for Natural Resources, Natalia Lacorzana, emphasized the bank's commitment to supporting the global transition to a green economy, particularly through funding junior miners of critical raw materials like graphite.
Use of Funds
The funds from EBRD will be used to advance the Sarytogan Graphite Project, including environmental permitting and early works on a Definitive Feasibility Study. This includes further metallurgical test work and the generation of customer samples.
Additionally, Sarytogan has committed to retaining control over Ushtogan LLP, which holds the Sarytogan Graphite Project, until the completion of the Definitive Feasibility Study. The company will also regularly report to EBRD on environmental and governance matters.
This investment is a strong endorsement of Sarytogan's governance and project quality. The injection of A$5M will significantly boost the company's ability to advance its graphite project, potentially increasing its stock value as investor confidence grows. The involvement of a reputable institution like EBRD adds credibility and may attract further investment.
Investor Reaction:
Analysts are likely to view this investment positively, as it not only provides necessary funding but also validates the project's potential. The strategic alignment with EBRD's objectives and the bank's rigorous due diligence process are seen as strong indicators of the project's viability.
Conclusion:
Investors should keep an eye on the progression of the Sarytogan Graphite Project, especially the upcoming Pre-Feasibility Study. The strategic partnership with EBRD positions Sarytogan well for future growth in the green economy sector. This investment could be a catalyst for further positive developments for the company.