Emerging graphite play Battery Minerals has signed a binding offtake deal with US-based graphite processor Urbix Resources.
The deal – for a three-year term starting in 2019 with an option to renew for another three years – is for the sale of up to 11,000 tonnes per annum of graphite concentrate at minimum 95 per cent total graphitic carbon content (TCG).
This represents around 20 per cent of the initial forecast annual output from its Montepuez project in Mozambique.
Urbix has committed to buy a minimum 5000tpa of graphite concentrate with an option to buy a further 6,000tpa to be exercised within 12 months of mining beginning at Montepuez.
Urbix will have a right to bid for up to 6,000tpa of additional production when Montepuez expands and a further 6,000tpa when the company’s Balama Central graphite project comes on stream.
This comprises potential agreements for an additional 18,000t above the initial 5,000 tonnes.
“This deal is pivotal for three reasons: it reflects the quality of the Montepuez product, it highlights the outstanding future of the project and it underpins the sale of a significant share of our forecast production,” Battery Minerals Executive Chairman David Flanagan said.
“With our $20 million capital raising recently completed, engineering studies progressing rapidly and now binding sales agreements in place, we are firmly on track to start construction in the next quarter and be commissioning in December 2018.”
Mr Flanagan said the company will also work with Urbix to develop and market the products to sell into the US battery market.
“Ongoing market development will include optimising development of a spherical graphite for use as anode material in lithium-ion batteries as part of an international marketing strategy,” he added.
Urbix Resources LLC is a privately-owned company based in Arizona in USA and has extensive expertise in purification, downstream processing and marketing of graphite.
Shares in Battery Minerals gained 4 per cent to close at 6.9c.