Battery Minerals has locked away 40% of its forecast annual production for its Montepuez graphite project in Mozambique in binding sales agreements after inking its second offtake deal in less than a month.
This time, Battery has inked a deal with Qingdao Guangxing Electronic Materials Co. Ltd (GEM) – a privately-owned company based in Shandong in China with extensive expertise in mining, production, downstream processing and marketing of graphite.
The agreement covers 10,000 tonnes a year of graphite concentrate for at least three years from Montepuez.
Investors liked the news with the stock climbing as much as 7% in Thursday trade to an intraday high of 7.3c.
It follows the binding offtake agreement signed last month with US-based Urbix Resources for up to 11,000tpa.
The company now has up to 40% of its forecast annual production covered by binding sales agreements, and is well on track for its first shipment of product in the March Quarter of 2019.
Battery Minerals Executive Chairman David Flanagan said the latest agreement provided further evidence of the quality of the Montepuez graphite concentrate.
“The agreement shows Battery Minerals is rapidly emerging as a significant global graphite producer which will enjoy low capital and operating costs and strong cashflows,” Mr Flanagan said.
“We have tailored the Montepuez project so that it is extremely bankable, it generates a product which meets the needs of battery manufacturers, delivers extensive benefits to the local community and creates strong returns for shareholders.”
“With two binding offtake agreements now signed, we are more confident than ever that we will achieve all these objectives.”
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Battery – which owns two world-class graphite deposits Montepuez and Balama in Mozambique – has produced high quality graphite flake concentrate at multiple laboratories.
Graphite flake concentrate is expected to be produced from its Montepuez Graphite Project in the December 2018 Quarter with first shipment in the March 2019 Quarter at export rates of 45,000 to 50,000tpa at an average flake concentrate grade of 96.7% TGC.
As Battery Minerals executes subsequent expansions, it expects production to grow to over 100kt per annum graphite flake concentrate from Montepuez by 2022.