Gratomic Inc. (TSX-V:GRAT, OTCQX:CBULF) has signed a non-binding letter of intent with Tristream Capital for a $5.2 million investment in exchange for a royalty on graphite sales from its Aukam property, pending due diligence and a definitive agreement.
The company announced on Monday that it has inked the agreement with Tristream, dated June 14, 2024, outlining TSC's planned investment of GBP 3 million (approximately C$5.2 million) in exchange for a 5% Gross Sales Royalty (GSR) on sales of graphite from Aukam.
The investment will begin six months post-receipt and will continue for 5.5 years, after which the royalty will be reduced to 1% GSR for the mine's life.
Gratomic is obligated to pay TSC 10% annual interest on the investment amount for the first six months. Following this period, the 5% GSR will be applicable for 5.5 years, transitioning to a 1% GSR thereafter for the life of the mine.
The royalty agreement will hold a first-ranking security interest over the plant and machinery at the Aukam property.
Additionally, Gratomic is bound by a standstill agreement, prohibiting it from soliciting or entering into similar transactions until either the investment is received or the LOI is terminated.
TSC will primarily prepare the definitive agreement, with Gratomic covering up to GBP 30,000 of TSC's due diligence expenses, subject to pre-approval for any expense exceeding GBP 2,000.
Gratomic specializes in the development of its Aukam graphite project and is focused on low-cost, eco-friendly graphite production.