Giyani Metals Corp. [EMM-TSXV, A2DUU8] said Wednesday, March 24 that it has raised $11.5 million from a bought deal equity financing that will be used to fund a feasibility study and engineering work at its flagship K. Hill manganese project in Botswana.
Giyani is currently focused on the development of its K. Hill, Lobatse & Otse manganese oxide projects in the Kanye Basin of Botswana. The flagship K. Hill project is a near-surface deposit currently winding its way through a feasibility study. The aim is to produce a high-purity electrolytic manganese metal and manganese sulphate, both key ingredients for batteries in the expanding electric vehicle market.
The bought deal financing consisted of 16.9 million units priced at 68 cents per unit, generating gross proceeds of $11.5 million, including the exercise of a green shoe option granted to the underwriters.
Each unit consists of one common share and one-half of one common share purchase warrant. Each warrant entitles the holder to purchase one common share of the company for $1.00 per share until September 24, 2022.
Giyani advanced on the news, rising 4.9% or $0.03 to 64 cents on volume of 60,000. Shares are currently trading in a 52-week range of 87 cents and $0.075.
According to an amended PEA announced in April, 2020, the K.Hill Project hosts an inferred resource of 1.24 million tonnes of 27.3% manganese oxide (MnO) at a cut-off grade of 8.9% MnO.
The PEA envisages a potential project with a 10-year life span, producing 236,000 tonnes of high-purity electrolytic metal. The project would require $150.6 million in pre-production capital, $13.7 million in sustaining capital, a contingency of $24.7 million, and $6.9 million for closure costs. That would bring the total estimated required project capital to $196 million.
Net proceeds of the bought deal will be used for drilling, a demonstration plant (pilot pilot), completion of a feasibility study, basic engineering, and front-end engineering and design, prepayments for long lead order items, additional staffing costs and other corporate purposes.
Manganese is among the most widely used metals in the world, fourth after iron, aluminum and copper. Historically, the demand, and hence the price of the metal is closely tied to demand for iron ore in China.