Berkwood Resources Ltd (CVE:BKR) announced Tuesday that it has secured an offtake agreement with the Carbon 6 Group of Companies in a move that will propel the explorer’s Lac Guéret graphite projects forward.
The offtake agreement for the Lac Guéret South and Lac Guéret Extensions projects was signed with the intention to secure evaluation and development funding, as well as long term product client arrangements, Berkwood said Tuesday.
The two projects contain high-grade graphite with a high percentage of large- and jumbo-sized flakes, setting it apart from other similar deposits.
According to the offtake agreement, Berkwood will supply Carbon 6 (C6) with 20,000 tons a year, subject to C6’s positive analysis. Berkwood is responsible for securing funding for development and start-up mining costs.
Lac Guéret Extension hosts a graphite showing that includes nearly 1.8 million tons grading 17% carbon as graphite (Cg) in the Indicated category and 1.5 million tons grading 16.4% Cg in the Inferred category.
Berkwood’s new offtake partner C6 is a group comprising of several carbon commodity entities that invests in assets and facilitates trading relationships with graphite commodity purchasers. The two companies will have a non-exclusive relationship according to the memorandum of understanding.
C6’s product analysis and testing program will focus on the characterization of project costs to profile initial Lac Guéret products against C6’s internal requirements for its own feedstock and outside customers. C6 will assume the cost of testing and analysis.
Berkwood said that preliminary results and an initial report is expected to be available in less than three months.
High quality material
“Our offtake agreement and MOU with C6 adds depth to the Berkwood Lac Guéret Extensions evaluation initiative and our emerging plans to fund our development studies for Lac Guéret South,” said Thomas Yingling, CEO of Berkwood.
“We look forward to working with C6 to further characterize the potential products from Lac Guéret South, and to extend our relationships in the graphite trade community.”
Paul Gorman, director and managing partner at C6, told investors: “The Lac Gueret South graphite deposit is a project that has high quality flake material in a mining friendly jurisdiction which will serve our North American hi tech customers extremely well once in production.”
In the event of successful financing from introductions and structuring arrangements led by C6, Berkwood will pay C6 certain finders fees for funds raised through C6 subject to a maximum of 5%, Berkwood said in a statement.
The company recently announced it was raising C$800,000 to be used towards exploration.
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