Miner Richland Resources (LON:RLD) has signed exclusivity and right of first refusal agreements with an unnamed “major international trading company”, which will evaluate the group’s graphite licence in Tanzania.
The trading company will “asses the feasibility of establishing a business relationship between Richland”, the AIM junior told investors.
The exclusivity period runs for three months with an additional three month right of first refusal period.
The area that is prospective for graphite, which is now strategic and therefore highly sought after mineral, is the Block C licence.
This is around a kilometre from where Richland currently mines Tanzanite.
It was formerly home to the Merelani graphite mine, which produced 6,776 tonnes of the material during 1996 before running into financial trouble.
Chief executive Bernard Olivier said: "We are pleased to announce the signing of this agreement as further evidence of the company's commitment to its growth and diversification plan into other associated minerals.
“The agreement is with a globally recognised integrated trading company with a track record of success working alongside mining companies of all sizes to deliver value for stakeholders.
“The initial three month period will involve the company working with Richland's experienced technical and management personnel at Merelani to evaluate all aspects of the graphite asset, with a view to establishing a long-term source of flake graphite.
“China's imposition of a 20% duty on all exports and the long term growth potential in the electric car battery industry will drive global demand for graphite and supports our decision to pursue this opportunity.
“We look forward to updating shareholders on the outcome of these evaluations in due course."