Magnis loses Peter Tsegas but refuses to quit Tanzania dream
The ASX-listed miner and energy player owes more than $14m to lenders, has $23,000 in the bank, and is now planning to dig deep for a graphite mine in the middle of Tanzania.
Magnis Energy Technologies is pressing ahead with its ambition to build a graphite mine in the deep interior of Tanzania despite the risk the East African nation’s government may strip it of the project.
The company’s key local operative quit the ASX-listed battery and graphite operator on Friday.
Once a favourite of speculators and valued at more than $770m, Magnis has turned into a sharemarket disaster.
Its battery gigafactory Imperium3 New York was stripped from its control by lenders, with the plant’s owners now using it for parts.
But on Friday, Magnis told shareholders it was seeking to press ahead with plans to develop its graphite mine Nachu, buried deep in the rugged Ruvuma basin in Tanzania’s interior.
Magnis said it had inked a deal with Yantai Xinhai Mining Research Design to mock up plans to begin building Nachu, including proposals to scope out a processing plant on site.
Magnis said the company, a subsidiary of Chinese mining contractor Xinhai, would be responsible for developing the processing plant and completing detailed engineering plans.
This comes after Magnis signed a deal with SMC, a subsidiary of SINOMA, and AUXIN Mining Services in Hong Kong.
This is the second time Magnis has sought to involve SINOMA after first inking a deal with the Chinese minerals giant in 2014 to supply nearly $US800m in graphite from the mine.
This deal came with a $US150m so-called term sheet spruiking plans for the Chinese player to finance the Nachu project. Despite this, Magnis never developed Nachu.
But Magnis appears to want to press ahead despite owing millions in a high-interest short term loan and facing a second attempt by the Tanzanian government to seize the project.
Magnis told investors last week it had been issued a default notice on Nachu last year, having failed to inform shareholders of this development for nearly a year.
It needs to repay funders for a $7.2m loan, plus more than $8.5m in interest costs.
Magnis told shareholders last month it had $23,000 cash in the bank, and a financial lifeline from lenders who claim they would backstop the company for a further $5m over the coming 12 months.
This is despite failing to pay directors, staff, and contractors for more than a year.
These include Magnis’ chair Frank Poullas, as well as outgoing director Peter Tsegas, who revealed he would quit on Friday after a decade on its board.
Magnis’ 2024 accounts, its most recent after failing to file in 2025, show the company owed Mr Tsegas more than $65,000, but paid him $103,000 to cover his “personal exertion fees”.
The Greek-Australian Mr Tsegas, who ran a failed South Australian winery, was revealed in The Australian to have met with wanted alleged drug lord Hakan Arif in Istanbul as part of a Magnis tour of Turkey.
Company documents also show Magnis previously paid Mr Tsegas $US15,000 a month to fund ‘liaison’ with the Tanzanian government, on top of more than $10,000 covering his costs for “personal expenses … such as rent, water, electricity, garbage collection, his partner’s gym membership, drinks, cigarettes”.
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