Canadian company, SRG Mining (TSXV: SRG), announced last week that it will re-domicile to the Abu Dhabi Global Market (ADGM) in the United Arab Emirates (UAE) after a review of several alternative mining jurisdictions.
According to SRG, the re-domiciliation will provide the company with “expanded strategic optionality” due to the UAE’s double taxation treaty and bilateral investment treaty with the Republic of Guinea, the host country of SRG’s flagship asset, the Lola Graphite Project.
The company intends to retain its listing on the TSX Venture Exchange (TSXV) and will require its approval for the UAE relocation.
Along with the noted financial motives, The Globe and Mail has noted that the move will also simultaneously skirt a national security review into the company’s key financing deal with China’s Carbon ONE New Energy Group (C-ONE).
In 2022, Canada asked three Chinese companies to sell their stakes in TSX-listed lithium explorers due to national security concerns. Since then, the Canadian government has scrutinized Chinese investment in the country’s junior mining sector, leaving the future of Chinese investments into the country ambiguous.
Canadian Energy and Natural Resources minister Jonathan Wilkinson, however, told Reuters last year that the government will not force Chinese investors to divest in larger mining companies, including Teck Resources, Ivanhoe Mines, and First Quantum Minerals.
C-ONE, a private battery materials company based in China, announced last July it would invest C$16.9M into SRG Mining for 19.4% of its share capital. The deal established C-ONE as one of SRG’s largest shareholders, second to the La Mancha Resource fund.
At the time, SRG warned its investors the deal would be scrutinized by the Canadian government under national-security grounds, but the recent legal maneuver to the UAE removes this requirement.
SRG will use the investment to advance the large-scale mine development project at the Lola Graphite Project, as well as develop an anode material plant.
Further, the company has met with other strategic partners who have expressed interest in becoming a Tier 1 supplier to the Western battery end markets and is advancing discussions with multiple parties who have expresses interest in providing financing to advance SRG towards first production.
The C-ONE transaction is subject to registration with Chinese regulatory agencies, as well as the Canadian government, pursuant to a voluntary notification.
SRG’s Lola project is located approximately 1,000km southeast of the capital of Guinea and boasts a large mineral reserve of 42Mt at a grade of 4.17% graphitic carbon. Over an estimated mine life of 29 years, it is expected to produce 54,600tpa of natural flake graphite.
