Stratmin - Bass deal

Stratmin Global Resources Plc

("StratMin" or the "Company")

GBP2 Million Investment from ASX listed Bass Metals Ltd

StratMin Global Resources Plc (AIM: STGR), London's only listed graphite production and exploration company, announces that it has negotiated a farm in agreement with Bass Metals Ltd ("Bass"), an Australian Stock Exchange ("ASX") listed resources company, for Bass to acquire up to a 35 per cent interest in the existing Loharano mine and processing operations of StratMin via an initial investment into Graphmada Mauritius ("Graphmada Mauritius"), the Company's wholly owned subsidiary, of £2 million in two tranches, for an initial interest of 25 per cent in Graphmada Mauritius (the "Initial Investment").



The agreement also allows for Bass, subject to the successful completion of the Initial Investment by 30 November 2015, to acquire, at its sole discretion, a further 10 per cent interest in Graphmada Mauritius prior to 31 December 2015, for a consideration to be determined by reference to the share price of StratMin at the time of the election to exercise the option.



The collaboration with Bass provides StratMin with a cost effective mechanism to access the sophisticated graphite investor base in Australia. The ASX currently has a number of listed graphite project developers and producers with a combined market cap in excess of A$1 billion. The ASX has active graphite stock trading, major institutional investor participation and equity research coverage on the sector from a number of international banks and broking houses. By partnering with Bass, StratMin is gaining exposure to this market and an efficient source of development capital. As the only successful new greenfield graphite mine developer, StratMin, and its Graphmada Mauritius subsidiary, are a differentiated opportunity in the Australian market.



StratMin will use the £2 million received from Bass to fund further optimisation work at its Loharano facility, to complete the Detailed Feasibility Study for the expansion of the Mahefadok project via a new mine and 12,000+ ton per annum plant as well as to initially capitalise the joint venture with Tirupati Carbons & Chemicals Group (P) Ltd. ("Tirupati") at the Vatomaina project, as announced on 18 June 2015. Together these projects are expected to re-position StratMin as a mid-tier international graphite concentrate producer.



Brett Boynton, CEO, commented:


"We are very pleased with the opportunity to partner with Bass in building Graphmada Mauritius and StratMin. This transaction enables the Company to fund the group with investment at a substantial implied premium to the current share price and demonstrates a strong endorsement of our strategy.


"Rick Anthon, Bass Chairman, has an exceptional depth of expertise in international resources and his current position in the leadership team at Orocobre Limited provides great exposure for StratMin. Orocobre Limited is the outstanding story at the moment in the Lithium Ion battery materials market, so this is a great opportunity to shine a light on what StratMin is doing in graphite. Working with Bass is a cost effective entry to the very sophisticated graphite and renewable energy investor base in Australia without the cost of a dual listing.


"This transaction reduces the funding risk going forward for StratMin by giving it access to a large and active graphite investor pool and gives the Company the confidence to look at more significant transactions going forward. We have an opportunity now to capitalise on the early mover status StratMin has gained and whilst most of our peers are focused on completing feasibility studies and cost cutting, together with Bass, we can work on expanding production from Loharano and developing new opportunities."


Transaction details:


1. Bass to invest £2 million in Graphmada Mauritius, the 100 per cent owned subsidiary of StratMin, which in turn is the 100 per cent owner of Graphmada S.A.R.L. the license holder and mine operator of the Madagascan assets. Following the £2 million investment, Bass will become a 25 per cent shareholder in Graphmada Mauritius with StratMin holding the balance.


2. The Initial Investment is binding, subject to satisfactory completion of due diligence by Bass and the parties agreeing to the terms of a shareholders agreement to govern the management and operations of Graphmada Mauritius by no later than 15 September 2015. The Initial Investment is to be made in two tranches, £500,000 to be received by StratMin by 30 September 2015 and £1.5 million to be received by StratMin by 30 November 2015 or a mutually agreed alternative date. StratMin's 25 per cent interest in Graphmada Mauritius will be transferred to Bass on a pro rata basis on receipt of funds.


3. Subject to the successful completion of point 2 above (the Initial Investment), Bass will be granted an option to acquire a further 10 per cent of Graphmada Mauritius.

The exercise price of this option will be set by reference to the 5 day volume weighted average price ("VWAP") of StratMin Ordinary Shares prior to Bass giving notice to StratMin of its intention to exercise the option according to the following formula:

10% interest in Graphmada Mauritius = (x/4.03) multiplied by GBP1.23 million

where x = the 5 day VWAP in pence per share.


4. StratMin will use the £2 million received for its interest in Graphmada Mauritius to fund further optimisation work at its Lohorano facility, to complete the Definitive Feasibility Study for the expansion of the Mahefedok project and to initially capitalise the joint venture with Tirupati to develop the Vatomaina project.


5. Any future funding requirements at Graphmada Mauritius will be met pro rata by the two parties according to their respective equity positions.


6. The parties will each have a mutual right of first refusal to meet any shortfall by the other in any future funding of Graphmada Mauritius.


7. The parties will also have a mutual right of first refusal to fund any new graphite investments outside of Graphmada Mauritius on a pro rata basis according to the respective equity positions in Graphmada Mauritius.


8. Any future profits from Graphmada Mauritius will be shared pro rata by the parties.


9. The common directors of StratMin and Bass, David Premraj and Jeffrey Marvin, have abstained from the StratMin Board vote on the transaction with Bass and under the terms of the agreement with Bass will not participate in any future StratMin Board decisions on matters concerning Bass, or exercise their respective voting rights in respect of any resolutions relating to Bass or any of its affiliates. It should also be noted that under Australian corporate law both David and Jeffrey were prohibited from participation in the decision by Bass to make this offer and similarly are prohibited in future participation in decision making at Bass regarding any involvement with the StratMin group of companies.

About Bass Metals Ltd:

Bass is an ASX listed resource investment and operations company led by veteran Australian corporate developer Rick Anthon. Rick is currently also a member of the leadership team at Orocobre Limited, a successful Lithium project developer with a circa A$275m market capitalisation. Orocobre Limited is positioned to take advantage of the increasing demand for lithium by the renewable energy and lithium ion battery industry. As such Rick is also intimately familiar with the growing demand for graphite in these industries.


The opportunity to invest in Graphmada Mauritius was introduced to Bass by two of StratMin's non- executive Directors, David Premraj and Jeffrey Marvin, who are also independent non-executive directors of Bass. Together, they bring considerable knowledge of StratMin's Madagascan operations to Bass and have enabled Bass to complete initial due diligence and formulate a proposal for investment and partnership. For the avoidance of doubt, David and Jeffrey both abstained from the StratMin Board vote on the transaction with Bass and have committed to abstaining from all future StratMin Board votes on matters concerning Bass.