Magnis Energy has been given a four-week lifeline as it faces a $4.6m cash call, with the listed miner and battery play revealing it is pushing ahead with its African graphite mine after inking a deal with Singaporean fundraisers.
In a market update on Monday, Magnis told investors it had pushed out the payment date on a $4.6m high-interest loan to March 31, after the loan was initially set to fall due on the first of the month.
Magnis made the announcement, three days after the loan was to fall due, revealing its maturity had been pushed out by “mutual agreement”.
The Australian reports it comes amid questions over the financial future of the company, which is facing a growing interest bill with a paltry amount of cash in the bank.
Magnis was expected to repay the $4.6m loan, plus almost $460,000 in interest, on March 1 after taking out the loan at 5 per cent interest per month.
Weeks earlier Magnis revealed it had just $532,000 in cash and had suspended payments to several directors amid the cash crunch.
Magnis told the ASX in January it could issue a further 300 million shares to meet its funding needs, noting it was “in final stage discussions regarding additional capital from the debt and equity markets and believes that an investment will be completed during the current quarter”.
Shares in Magnis are still suspended from trade, having been pulled from trading boards in December by the ASX.
The market operator warned Magnis had failed to comply with listing rules and periodic reporting obligations on an ongoing basis.
Magnis is due to publish its half-year accounts in the coming weeks. It comes as the company announced it was pushing ahead with plans to develop its Nachu graphite project in the east African country of Tanzania.
Work on the mine site, about 220km inland from the port city of Mtwara, has been slated for commencement several times, with Magnis making a number of announcements about offtake deals and development plans.
On Monday Magnis said it had secured backing from Singapore-based private investment firm PEY Capital to assist in sourcing $US320m ($490m) to fund the Nachu mine.
Magnis said PEY Capital, which records show was previously known as Iberica Investments International and PAI Capital, had entered into the deal after four months of diligence.
PEY is in an exclusivity period until April 12 and has engaged Tantel, a related Tanzanian entity to assist in sourcing support for the project in Tanzania.
Magnis chair Frank Poullas said the financing discussions with PEY and Tantel “continue to progress in a positive manner”.
“In recent months Magnis has been in discussions for the offtake of significant volumes of graphite concentrate,” he said.
Magnis has signed at least five deals to sell graphite from site Nachu, most recently inking a deal in December 2021 to sell 600,000 tonnes to commodities broker Traxys.
This deal saw Magnis pay Traxys 700,000 shares upfront plus a further 1.3 million options in the miner, with plans to start delivering graphite in the second half of 2024.
Magis said its new deal with PEY would see it funded to produce only 240,000 tonnes per annum of graphite concentrate.
Magnis told investors its graphite project in Tanzania could be worth as much as $4bn at its annual meeting in November, but was forced to retract the claim after “consultations with the ASX”.
Separately, last Friday, the S&P Dow Jones Indices announced it would dump Magnis from its All Ordinaries index prior to market open on March 18.
This story was originally published by The Australian.
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