Giyani Metals, a mining company focused on the development of its K.Hill battery-grade manganese project in Botswana, has finalised a significant $26m (C$35.13m) funding package.
This financial boost comes through a $10m investment by ARCH Sustainable Resources Fund, a private equity fund, and a $16m convertible loan facility from the Industrial Development Corporation of South Africa.
The $10m investment from ARCH is a pivotal step, enabling Giyani Metals to access the larger $16m loan facility.
The funding from ARCH comprises two parts – a $4.8m unit offering priced at C$0.117 per unit, where each unit includes one common share and one warrant. These warrants can be exercised at C$0.225 each for five years.
Additionally, ARCH will provide $5.2m in exchange for a 2% gross revenue royalty on the project.
This royalty agreement includes a 1% buyback provision and will decrease by 0.5% after either 20 years or the production of 2.5 million tonnes of high-purity manganese sulphate monohydrate (HPMSM).
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By GlobalData
Together, these funds are earmarked to bring the K.Hill project to a final investment decision (FID).
Giyani plans to conduct an optimised feasibility study and to construct, commission and operate a demonstration plant.
The demonstration plant is a critical component of the project as it will produce HPMSM suitable for battery manufacturing.
It will allow Giyani Metals to engage with potential customers and demonstrate the viability of their product.
With the completion of the funding and the drawdown conditions, Giyani Metals is set to continue its critical workstreams to advance the K.Hill project towards the FID.
Following the ARCH offering, the fund will hold an approximate 19.99% ownership stake in Giyani Metals.
Giyani Metals president and CEO Danny Keating said: “We are delighted to welcome ARCH as a shareholder and strategic partner to assist us in the long-term development of K.Hill. Attracting a group with such strong ESG [environmental, social and governance] credentials rewards the hard work that the team has undertaken to date and confirms our execution strategy.
“After completing an incredibly thorough due diligence process performed by world-class engineering, marketing and social and environmental consultants, we are very excited to welcome two high-quality investor groups to the company.
“Despite the difficult market conditions, the package we have secured minimises dilution for current shareholders and gives us the financing to fundamentally de-risk the project and unlock the massive value contained within K.Hill.”
