(MENAFN - ProactiveInvestors - Australia) Kibaran Nickel (ASX: KNL) can now move to complete the acquisition of Tanzgraphite, which has secured options over 1,308 square kilometres known as the Mahenge and Arusha projects in Tanzania, with the successful completion of a nearly A900,000 rights issue.
The underwritten one for three non-renounceable rights issue offered shareholders up to about 12.8 million shares at 0.07 per share.
Shareholders took up around 9.8 million of the rights issue raising over 684,000 of the total, with the remaining 3 million being placed with the underwriters of the rights issue to raise the remainder.
With graphite's substantial return to interest over the past six months Kibaran Nickel's shareholders will already be realising gains on their investment with shares currently trading at nearly three times the offer price.
Graphite's potential to be used in new applications such as lithium ion batteries, hybrid and electric vehicles and new age energy generation including solar panels and nuclear power stations, has seen an increase in demand for the commodity.
Historically the market for graphite has been around 1-1.2 million tonnes per annum. New age applications have the potential to at least double perhaps even triple that, leading to exponential growth as far as graphite demand is concerned.
Most western governments classify graphite as a "critical mineral" and depend on supplies from China, Brazil, and India, which produce nearly all of the world's graphite.
China has emerged as the dominant supplier of graphite, accounting for around 70 to 80% of global supply.
With the acquisition, Kibaran Nickel can be expected to provide investors with plenty of excitement, tracking the intense interest in graphite.
It also presents the company with an early mover advantage having gained an option over one of the two known historical occurrences in the region, with Syrah Resources (ASX: SYR) having acquired the other at Nachingwea.
The Mahenge project hosts the most prospective target, Ndololo, which has been shown to host grades of 15.5% carbon in previous exploration.
Ndololo has an exploration target of between 3.5 and 7 million tonnes at between 10% and 15.5% carbon.
The total graphitic carbon grade at Mahenge has been shown to compare favourably to Focus Metals' (OTXQX: FCSMF) Lac Knife project in Canada and Syrah Resources' Balama project in Mozambique.
Exploration work undertaken in 1945 also indicated a 97.5% recovery of flake graphite, with flake sizes ranging between 1.5 and 8.5 millimetres in size.
Mahenge hosts two other prospects, Epanko and Kasita, which are also prospective for similar graphite flake sizes to Ndololo.
The Arusha project has also been shown to host several graphite occurrences within graphitic schists, mapped over 1.5 kilometres long and up to 200 metres in width.