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  • Graphite explorer Volt Resources (VRC) is set to acquire a 70 per cent interest in the Ukraine-based Zavalievsky group of companies (ZG Group)
  • Volt entered term sheets with shareholders of the three companies that make up the ZG Group
  • Through the US$7.5 million (roughly A$9.8 million) deal, Volt will gain access to the Zavalievsky graphite business, which includes a major operation that has spanned nearly nine decades
  • The graphite operation poses multiple advantages, including excellent infrastructure, and is located in a region at the heart of the growing EV industry
  • Volt also plans to leverage the project's existing customer base and supply chain to support its Bunyu graphite project in Tanzania
  • Ultimately, the proposed acquisition aligns with Volt Resources' goal to supply graphite to the growing European market
  • The company has until April 23 to complete due diligence and finalise the transaction
  • Volt is down 10.5 per cent and shares are trading at 1.7 cents

Volt Resources (VRC) is looking to acquire a 70 per cent interest in the Ukraine-based Zavalievsky group of companies (ZG Group).

Volt will acquire a 70 per cent interest in each of the companies that the ZG Group is made up of. They include Zavalievsky Graphite, Stone Found, and Graphite Invest who holds a 70 per cent interest in PJC Zavalievsky Graphite Kombinat — mine, land, and main admin office building. It's this company that holds a 79 per cent interest in the 636-hectare land area where the Zavalievsky mine, processing plant and other related facilities are located.

The graphite explorer entered term sheets with four shareholders of each of these companies — all of which are Ukraine citizens.

The ZG Group operates a major graphite project that has been operating for 87 years. The graphite mine and processing facilities are located adjacent to the town of Zavallya, which is around 280 kilometres south of the Ukraine capital of Kyiv.

The US$7.5 million (roughly A$9.8 million) buy presents multiple advantages. The operation is located in Eastern Europe which hosts a number of significant developments that will complement the electric vehicle and renewable energy sectors. The project is also capable of making a range of graphite products and has the potential to increase its large flake production.

Ultimately, the proposed acquisition aligns with Volt Resources' goal to supply graphite to the growing European market.

Additionally, the graphite operation has excellent infrastructure, power and water supply and already has an existing customer base and supply chain that Volt will aim to leverage off to support its Bunyu graphite project in Tanzania.

"We are excited by the potential benefits in acquiring a controlling interest in the ZG Group on Volt’s graphite strategy. This is a rare opportunity to acquire an existing graphite business located in Europe at a fraction of the development cost of a new project," Volt Chairman Asimwe Kabunga said.

The purchase price of US$7.5 million (roughly A$9.8 million) is split into two equal instalments, with the first due as soon as the transaction has been completed. The second is due six months after that.

Before the transaction can formally go ahead, there are a number of conditions. These include Volt conducting due diligence, obtaining governmental, regulatory and other necessary approvals, no material adverse change in the ZG Group, its operations, or financial condition, and no law, order or legal proceeding that may challenge the proposed transaction.

In addition, Volt will need to enter a binding share sale and purchase agreement with the shareholders.

Finally, each shareholder has granted Volt exclusivity until April 23, 2021, to complete its due diligence enquiries and finalise the remaining terms of the transaction.

Volt is down 10.5 per cent and shares are trading at 1.7 cents at 10:19 am AEDT.

VRC by the numbers
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