Magnis Resources locks-in cornerstone investor, boosts cash to advance graphite and battery assets

Magnis Resources (ASX: MNS) has topped up its cash reserves to advance its flagship Nachu graphite project in Tanzania and proposed battery plants, after AL Capital scooped up a 4.98% cornerstone stake in the company for $11.1 million.

AL Capital’s $11.1 million investment in Magnis equated $0.37 per share, which represented a 4% premium to Magnis’ 15-day volume weighted average price of $0.356.

“We are delighted to have secured this investment in Magnis,” AL Capital chief executive officer Wayne Mo said.

“We believe that their battery projects and their technological capabilities that are currently in development are well advanced with global scaling,” he explained.

Meanwhile, Magnis chairman Frank Poullas said Magnis’ financial position was “secured for the medium-term”.

“More importantly, we have a strong partner and we welcome AL Capital’s investment,” he added.

As part of the transaction, AL Capital will appoint a representative to Magnis’ board.

Queensland Government grant

Today’s news follows Magnis’ announcement it’s partly owned subsidiary Imperium3 Pty Ltd had received a $3.1 million grant from the Queensland Government to underpin a feasibility study into building a 15 gigawatt hour lithium-ion battery manufacturing plant in Townsville’s Woodstock advanced technology precinct.

Magnis owns a third in the subsidiary along with fellow holders US-based Charge CCCV and private Australian company Boston Energy and Innovation.

As part of the feasibility study, Imperium3 will meet with vendors to refine the concept design and set out engineering package deliverables and schedules.

The feasibility study lead construction partner Probuild plans to continue compiling site details in readiness for following work.

In parallel, talks will continue regarding infrastructure provision and funding for delivering the proposed plant.

Nachu graphite project

Magnis owns the Nachu graphite operation in Tanzania where it has produced a 99.99% pure coated spherical graphite anode product.

The operation has an initial estimated 15-year life producing 240,000 tonnes per annum of graphite concentrate.

During the June quarter, Magnis proceeded with essential preparations to comply with the Tanzanian Government’s legislation  to move into production as soon as possible.

Integrated supply chain

To firm up its exposure to the trillion dollar battery value chain, Magnis has secured agreements to participate in several global consortiums to build and operate lithium-ion battery gigafactories in Australia, the US and Germany.

Magnis aims to provide raw materials and technologies to assist in the production processes.

As part of this strategy, Magnis has a 44% interest in the Imperium3 New York consortium which is establishing a 15Gwh per year lithium-ion battery gigafactory at the Huron Campus in New York, with battery manufacturing scheduled to begin in mid-2019.

By early afternoon trade, Magnis’ share price had lifted 2.63% to $0.39.