Total Graphite PLC (TGR.L) has announced the signing of Heads of Terms for the potential acquisition of a cash-generating graphite reprocessing business in Tanzania, alongside a completed £0.41m fundraise through convertible loan notes. The Tanzanian target company, referred to as TZC, has been operational since May 2026 and has already exported over 2,000 metric tonnes of graphite to international customers. The transaction, subject to due diligence, definitive documentation, and shareholder approval, is part of Total Graphite's stated strategy to build a multi-jurisdiction, vertically integrated natural flake graphite business spanning Madagascar, Mozambique, and now Tanzania.

Key Points

  • Total Graphite PLC (TGR.L) is a natural flake graphite company with assets in Madagascar and Mozambique
  • Heads of Terms signed to acquire 100% of a cash-generating Tanzanian graphite reprocessing business known as TZC
  • Initial consideration of £1.88m to be settled via 188 million new shares at 1p per share; deferred consideration of up to £4.7m contingent on future operating cashflows
  • Investors should watch for the targeted general meeting in December 2026 and initial Montepuez study results expected in November 2026

TZC's Tanzanian Operations: 12,000-Tonne Plant Running, Second Under Construction

TZC purchases locally mined graphite in Tanzania, upgrades it through recently constructed processing plants, and exports the material to international customers. The business operates a 12,000-tonne-per-annum plant, with a second facility of equivalent capacity currently under construction. Since commencing operations in May 2026, TZC has supplied over 2,000 metric tonnes of graphite to buyers worldwide. The company also holds exploration permits across key graphite regions of Tanzania, which the announcement states could underpin a significant expansion of primary processing capacity in the future. TZC's operational management team is expected to join Total Graphite upon completion of the acquisition.

Acquisition Consideration Structure: Shares at 1p and Performance-Linked Deferred Payment

The upfront consideration for TZC is £1.88m, to be settled through the issue of 188 million new shares priced at 1p per share. A deferred element of up to £4,698,750 is also proposed, payable in up to 313,250,000 shares at 1.5p per share, calculated as the lower of 50% of TZC's annual operational cashflows or £1.5m per year. TZC will be acquired on a debt-free basis, and a working capital facility of up to US$1 million will be provided by TZC itself to support the business post-completion. The transaction remains conditional on due diligence, regulatory consent, and shareholder approval, with a general meeting targeted for December 2026.

£0.41m CLN Fundraise Terms: 12–15% Interest and Half-Warrant Attached

The completed convertible loan note fundraise raised gross proceeds of £0.41m. The CLNs convert into shares at 1p per share at the holder's option, carry a two-year term, and bear interest at 12% in year one and 15% in year two, with interest payable in shares at the holder's election. Each CLN carries the equivalent of half a warrant per share, exercisable at 1.5p for up to two years. Finance Director Thomas Hill subscribed £10,000 to the CLN on identical terms to other investors, as disclosed in the accompanying PDMR notification. The company states the proceeds will fund working capital for near-term workstreams including due diligence on TZC.

Vatomina Drilling and Montepuez Feasibility Update Progressing Alongside Tanzania Push

Alongside the proposed acquisition, the announcement confirms that the Montepuez Definitive Feasibility Study update, being conducted by Lycopodium, is progressing on schedule with initial results expected in November 2026, and several processing improvement opportunities have already been identified. Optimisation work, including drilling, is ongoing at the Vatomina project in Madagascar, with initial mine plans to support a restart expected within weeks. Total Graphite's board states that having a revenue-generating Tanzanian operation would support longer-term development decisions across its Madagascar and Mozambique portfolio, though the transaction faces execution risk given the number of conditions still to be satisfied.