Giyani Metals (TSXV: EMM) has secured a $16 million financing from the Industrial Development Corporation of South Africa (IDC) to fund the development of its K.Hill battery-grade manganese project in Botswana.
The IDC financing is the cornerstone of a $26 million funding package that will be used over the next 15 months to progress K.Hill towards a final investment decision (FID), including an optimized feasibility study for the project and operating the company’s demonstration plant for producing battery-grade manganese.
The IDC is a major South African development financing institution with over 80 years of experience investing in industrial companies and the mining sector. It typically invests over $1 billion each year in mining and infrastructure related projects.
“We are delighted to announce the IDC funding as a resounding vote of confidence in K.Hill. This brings on board a strategic partner with significant mining and industrial development experience,” Giyani Metals CEO Danny Keating said in a news release.
“The investment provides the majority of the financing that Giyani requires to de-risk the project through to FID and introduces a partner with a vision and ambition to be involved in the development and capital funding of the project,” Keating said.
The IDC funding comprises two separate loan facilities ($12.5 million and $3.5 million) with similar terms attached. Criteria are attached to the IDC facility include the commissioning of the demonstration plant by the first anniversary of the first drawdown date and completion of the optimized feasibility study within 90 days after that.
The remaining $10 million of the funding package is in the process of being secured from a strategic investor that has completed its due diligence and is currently in the final documentation stage.
K.Hill is a near-surface manganese oxide deposit located about 60 km southwest of Gaborone, Botswana’s capital.
A July 2023 preliminary assessment outlined robust economics for the potential open-pit mine, highlighted by a post-tax net present value (at 8% discount) of $984 million and 29.4% internal rate of return. Initial capital expenditure of the K.Hill project is estimated at $284 million.
Over a 57-year project life, K.Hill is expected to supply over 3.5 million tonnes of high-purity manganese sulphate monohydrate to the electric vehicle industry. The mineral ore is processed using a hydrometallurgical process developed by the company, which will be tested by the upcoming demonstration plant.
K.Hill is not the only manganese project to secure major financing recently. Earlier in the week, Euro Manganese (TSXV, ASX: EMN) signed definitive agreements with Orion Resource Partners Group for a $100 million financing to advance the Chvaletice project in the Czech Republic.