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Junior Volt Resources has signed a term sheet to potentially acquire a 70% interest in the Zavalievsky graphite business, in the Ukraine.

Zavalievsky is a long life graphite operation that has been operational for 87 years, and currently produces around 250 000 t/y of crushed granite for road construction and concrete manufacturing.Volt believes that there is potential to substantially increase annual production of crushed granite through the expansion of the crushing and screening equipment.

The Zavalievsky Graphite (ZG) Group has current plans to install a processing plant and equipment in order to start the production of spheronised purified graphite for the European lithium-ion battery anode market within the next 12 months.

Furthermore, a garnet tailings recovery circuit has also been constructed, but is yet to be commissioned into the operation. The construction of this recovery circuit provides an opportunity to develop a viable industrial garnet business, said Volt on Friday, particularly considering the Zavalievsky mine’s close proximity to European markets.

Under the terms of the agreement, Volt would potentially acquire a 70% interest in each of the companies comprising the ZG Group, including Zavalievsky Graphite, which owns processing plant and mining equipment, Stone Found LLC, which will entail the crushed granite operations, and Graphite Invest LLC, which holds a 70% interest the mine, land and administration buildings and holds a 79% interest in 636 ha of freehold land in which the Zavalievsky mine, processing plant and other related facilities are located.

Volt would pay a purchase price of $7.5-million for this interest, payable in two installments of $3.75-million each, with the first installment due on the completion of the transaction, and the second due six months after the date of that completion.

“We are excited about the potential benefits in acquiring a controlling interest in the ZG Group on Volt’s graphite strategy. This is a rare opportunity to acquire an existing graphite business located in Europe at a fraction of the development cost of a new project,” said Volt chairperson Asimwe Kabunga.

“It has the potential to make Volt a key participant in the supply of graphite into the growing European market with excellent access to other markets in the US and the Middle East.”

He said that the company’s ability to complete funding for its Bunyu project would also be enhanced by this potential acquisition, to accelerate the transition to a graphite producer with a customer base, sales revenue and cashflow generation along with in-house operating and technical expertise to de-risk the Bunyu development.

Volt has been granted exclusivity until April 23 to complete its due diligence and to finalise the terms of a definitive agreement.