Volt Resources Ltd (ASX: VRC) shares are soaring today following news of the company's latest acquisition. At the time of writing, the Volt share price is trading at 2.4 cents, 20% higher than yesterday's close.
This comes after the company advised it has signed binding share purchase agreements to acquire 70% of European graphite producer, Zavalievsky Graphite (ZG).
Let's look further into the graphite and gold explorer's new acquisition.
Breaking into graphite
According to Volt, the acquisition will see it move from graphite explorer to graphite producer and place it in a more secure position than that of its peers by removing greenfield financing and development risks.
ZG owns a graphite mine, with processing facilities located approximately 280 kilometres south of the Ukraine capital Kyiv and 230 kilometres north of the main port of Odessa.
Volt states that its acquisition will immediately make it one of only a few graphite producers on the ASX.
The acquisition will see Volt take a 70% stake in ZG at a cost of US$7.6 million over two instalments. The first instalment is due upon purchase and the second is due six months later.
According to Volt, the ZG business is close to key markets with significant development of lithium-ion battery facilities planned to service the European electric vehicle market.
Volt stated in its release today that ZG produces "green purified 99.5% TGC (total graphitic content) product". Additionally, the business has the potential to increase its large flake production and has a long production life.
ZG has plans to install a processing plant and equipment to begin production of spheronised, purified graphite for the European lithium-ion market in the next 12 months.
Commentary from management
Volt managing director Trevor Matthews commented that the agreement is a significant step for the aspiring graphite producer. He said:
The acquisition of a controlling interest in the ZG Group positions Volt years ahead of its peer graphite companies and without the usual development risks associated with a greenfield project…
Following Volt's recently announced membership of the European Battery Alliance providing Volt with access to business development opportunities and a business investment platform, the ZG Group acquisition has the potential to make Volt a key participant in the supply of graphite and battery anode materials into the growing European market with excellent access to other markets in the USA and Middle East.
Volt Resources share price snapshot
The latest news from Volt Resources is boosting its share price again, adding to the company's great year on the ASX so far.
Currently, it's up 150% year to date. It's up by the same amount over the last 12 months.
The company has a market capitalisation of around $47 million, with approximately 2.3 billion shares outstanding.
