David Flanagan’s Battery Minerals has raised $20 million in an oversubscribed share placement to help fund development of its Montepuez graphite project in Mozambique.

The raising, at 6¢ a share, represented a 4.8 per cent discount to the stock’s last trading price, and comes with a one-for-two free option exercisable at 10¢ by July 2023.

Battery also wants to raise a further $5 million through a share purchase plan on the same terms.

The company revealed its biggest shareholder Farjoy (12.5 per cent) had committed $5 million for the second tranche of the placement.

Mr Flanagan said the raising marked another step towards production and cashflow from Montepuez.

“We were overwhelmed with offers from investors who were attracted to the short lead time to production and cashflow,” he said.

Mr Flanagan said construction at Montepuez was already well advanced with long lead items on order.

“We commissioned our crushing circuit last week,” he said.

The company announced this month that it had struck a US$30 ($39.77) million funding agreement with RCF comprising US$25 ($33.14) million in debt and US$5 ($6.63) million in equity.

Montepuez, which has an estimated capital cost of US$42 (55.67) million, aims to cash in on surging demand for graphite from lithium battery manufacturers.

Battery said the proceeds of the raising would be used to fund construction of Montepuez and for further studies on its second graphite project in Mozambique, Balama. The combination of the raising and the RCF arrangement means Battery is on track for project commissioning at Montepuez early next calendar year.

Key items for the processing plant and camp have been bought and binding offtake agreements are in place covering 80 per cent of the forecast production from stage one of the project.

Under stage one, Montepuez will produce about 50,000 tonnes of graphite concentrate a year, rising to 100,000t under stage two.

Photo: David Flanagan, The West Australian.