Sarytogan Graphite Ltd (ASX:SGA) has received a resounding validation of the economical and technical chops of its namesake graphite deposit, having drawn a $5 million investment from the European Bank for Reconstruction and Development (EBRD).
The EBRD is a public bank with shareholders in 73 countries, an international financial institution that actively seeks to build competitive, green, socially responsible market economies.
The bank has invested more than €200 billion (~A$330 billion) in over 7,100 projects, with 80% of funds going to private sector companies.
“We are pleased to support the Sarytogan Graphite project, the first graphite project financed by the Bank, on its path to become a responsibly mined source of battery grade graphite for Europe and the world,” EBRD director for natural resources Natalia Lacorzana said.
“EBRD is committed to supporting the global transition to a green economy, the move towards wider adoption of electric vehicles, in particular, via providing necessary funding and know-how to junior miners of critical and/or strategic raw materials.”
Ringing endorsement of the project
“Sarytogan is delighted to attract this investment from the EBRD,” Sarytogan Graphite managing director Sean Gregory said.
“The investment follows extensive technical and legal due diligence by the bank and we see it as a ringing endorsement of the governance of the company and the quality of the Sarytogan Graphite Project.
“We share an alignment of strategic objectives to power the green economy by developing the Sarytogan Graphite Project with the highest standards in governance and environmental performance.”
The investment will take place in two tranches; the first will consist of just over $2.6 million, representing over 16.5 million SGA shares or 9.99% of issued capital at 16 cents per share.
The second tranche will fill the remainder of the $5 million investment, covering a further 14.7 million shares at 16 cents for the EBRD to hold a 17.36% total shareholding in SGA.
Details of investment agreement
Sarytogan expects the first tranche to be issues by the end of October and the second in December.
EBRD will also have the right to nominate a director to the Sarytogan board on completion of Tranche 2, and SGA will be required to meet the bank’s environmental and governance standards with regular reports.
SGA is now preparing to publish a pre-feasibility study for the project, no later than September this year.
The funds will go to advancing the project, including the progression of the environmental permitting and early works on a definitive feasibility study including further metallurgical test work and customer sample generation.