Total Graphite Plc Regulatory News (TGR)

08 August 2022

Tirupati Graphite plc

('Tirupati', 'TG' or the 'Company')

Convertible Loan Note

Tirupati Graphite plc (TGR.L, TGRHF.OTCQX) is pleased to announce that it has raised £1,500,000 by a private placement (the 'Offering') of Convertible Loan Notes (the 'Loan Notes') through its Broker Optiva Securities Ltd ("Optiva") as a first tranche of £3,000,000 raise. The proceeds from this initial tranche will be used to fund:

· the upfront cash payment obligation (upon completion which awaits approval of share transfer by the relevant Mozambique Governmental authority) of Australian $1,500,000 (c.£860,000) to Battery Minerals Ltd ("BAT") for the acquisition of Suni Resources SA, the Mozambique subsidiary of BAT holding the construction initiated Montepuez Project ("Montepuez") and advanced stage Balama Central Project ("Balama") in Mozambique; and

· progress the Company's under construction 18,000 tpa flake graphite facility at its Sahamamy project in Madagascar to reach completion by end of September 2022, as well as for general working capital requirements.

The Company and Optiva remain engaged to raise the balance in a second tranche to meet the mandatory requirement to provide a bank guarantee for the Balama Central License as part of the Mozambique acquisition and for working capital for the Company's expanding operations in Madagascar.

Abridged Terms of the Offering

The Company has created 3,000,000 Loan Notes of £1 par value each, of which an initial tranche of 1,500,000 have been placed.

The Loan Notes have a three-year maturity and a 12% coupon, payable semi-annually, with interest accruing on a daily basis. Semi-annual interest payments will represent 6% of the par value of the Loan Notes outstanding. At maturity, all outstanding Loan Notes, if not converted, shall be redeemed at their par value, plus any and all accrued interest. The Loan Notes will be direct, subordinated, unsecured obligations, will not be secured by any mortgage, pledge, or other charge, and will rank equally with one another and with all other existing and future unsecured indebtedness of the Company, except as prescribed by law. The terms of the Loan Notes will not restrict the Company from incurring additional indebtedness for borrowed money or from mortgaging, pledging or charging its properties to secure any indebtedness.

Each outstanding Loan Note shall, at the discretion of the holder, have the right to convert into ordinary shares of the Company at the conversion price at any time. The conversion price is £0.60 up to the first anniversary of the date of the Loan Note instrument, £0.75 from and including the first anniversary of the date of the Loan Note instrument up to the second anniversary of the Loan Note instrument, and £0.90 from and including the second anniversary of the Loan Note instrument. Upon Conversion, all accrued interest shall be paid to the holder in the form of cash.

The Company may at its election convert outstanding Loan Notes at the applicable conversion price if the 10-trading day VWAP of the Company's ordinary shares is more than 150% of the applicable Conversion Price in any given period.

About Suni Resources SA

The Company entered into an agreement to acquire Suni Resources S.A. in August 2021 (see RNS dated 17 August 2021) holding the Montepuez and Balama flake graphite projects. The consideration agreed for the acquisition was AU$ 12,500,000 of which AU$ 1,500,000 is agreed to be paid in cash on completion and balance being Australian$ 11,000,000 is agreed to be paid by issue of 5,667,288 ordinary shares in the Company ("TG Shares") at an issue price of £1.03 per ordinary share in two equal tranches, first on completion and second eight months thereafter.

While the Montepuez project was fully licensed construction initiated at the time the acquisition agreement was entered into, Balama was awaiting approval for grant of the Mining Concession which was approved on 03 November 2021. The grant of the mining concession triggered the obligation of Suni to provide a Bank Guarantee of c.GBP 1,000,000 as a performance bond under the Balama project license conditions. We have now been advised by BAT that the application for approval of transfer under the agreement is in the final stages of assessment, triggering the company's effort to raise funds for completion obligations. It is noted that there is no guarantee that the approval shall be granted.

The completion of the acquisition would enhance the Company's flake graphite JORC (2012) reserves and resources in Mozambique as below

Shishir Poddar, Executive Chairman of Tirupati Graphite, said:

"We are pleased to have secured funding for our ongoing activities and we would like to thank our shareholders and investors for their support. We also thank Optiva for arranging this financing on behalf of the Company.

It is our stated target to be a company producing circa 8% of the global flake graphite market. The flake graphite markets remains on course to grow to above 5 million tons of annual demand by the turn of the decade, thus securing sufficient resources to build out to 400,000 tons over the coming years has been a key objective of the company and will be achieved with the acquisition of the Mozambique assets. At Madagascar we remain on track to build up to 84,000 tons annual capacity over the next couple of years and we are currently on the cusp of reaching 30,000 tons annual capacity installed.

We remain engaged to execute on our plans to build one of the most significant players globally in this critical material, which is so vital for realising the objectives of the Energy Transition.

We remain thankful to the BAT team for their continued efforts and support in respect of the pending acquisition. It will be our priority to get on the ground post completion as soon as possible and take the extensive work done by them through to fruition, which we firmly believe shall be in the interest of all stakeholders."

ENDS

For further information, please visit https://www.tirupatigraphite.co.uk/ or contact:

About Tirupati Graphite

Tirupati Graphite Plc is a specialist graphite and graphene company. The Company places a special emphasis on "green" applications, including renewable energy and energy efficiency, energy storage and thermal management and is committed to ensuring its operations are sustainable as well. 

The Company's operations include primary mining and processing in Madagascar, where the Company operates two key projects, Sahamamy and Vatomina; 12,000 tpa installed capacity of high-quality flake graphite concentrate with up to 96% purity is currently being produced and sold to customers globally, planned to increase to 84,000 tpa by end 2024 as per the Company's modular medium-term development plan. 

The Company has an acquisition agreement, subject to regulatory approvals, with Tirupati Speciality Graphite Private Limited ('TSG'). TSG operates and is developing a suite of speciality graphite for use in hi-tech applications like lithium-ion batteries, fire retardants, thermal management, and composites. It also operates a technology centre developing advanced materials including graphene and its applications, and mineral processing technology on commercial basis.