StratMin nets premium price for graphite operation stake Share...

StratMin nets premium price for graphite operation stake
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10:31 02 Sep 2015
The collaboration with Bass gives StratMin wider access to the graphite market.
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Worker at the company's Loharano operation.

Shares StratMin Global Resources (LON:STGR) rose after it has agreed to sell a 25% stake in its Madagascar mine to specialist graphite investor, ASX-listed Bass Metals.

The £2mln sale values the Loharano operation at £8mln – well in excess of the StratMin’s current market capitalisation of £5.4mln.

Bass, which has investments in graphite companies with a combined market capitalisation of £460mln (A$1bn), has the option to take the stake to 35%.

The investment will fund further optimisation work at its Loharano facility and a detailed feasibility study for the expansion of the Mahefadok project via a new mine and 12,000 ton per annum plant.

It will also allow it “initially capitalise” the joint venture with Tirupati Carbons to develop the Vatomaina graphite deposit, also in Madagascar.

StratMin will earn up to 45% of the project via a “staged investment” of £980,000 (US$1.5mln).

The AIM-listed mine developer said the collaboration with Bass provides it with a “cost effective mechanism to access the sophisticated graphite investor base in Australia”.

Chief executive Brett Boynton added: "Rick Anthon, Bass chairman, has an exceptional depth of expertise in international resources and his current position in the leadership team at Orocobre Limitedprovides 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.”