Gratomic Inc said it has signed an indicative term sheet with Millenium Metals LTD (TM2) to supply graphite over 60 consecutive months, beginning upon commencement of commercial production at its Aukam Graphite project in Namibia.
The companies forged a strategic partnership with the intention of being the first to industrialize graphite as a commodity.
Technology Metals Market, or TM2, is the world's first spot market where direct investment in technology metals is possible. It is quickly becoming the one-stop-shop for electric vehicle (EV) battery manufacturers and OEMs.
READ: Gratomic announces initial metallurgical test results from trenched material at its Capim Grosso project
The metals and minerals available on the TM2 platform are essential to EV batteries, aerospace, semiconductors, and many additional high-tech industries. Its innovative approach to commodities has created a global community within the EV space.
"Gratomic, like TM2, is founded on forward-thinking and this transaction is a prime example of how we strive to create opportunities rather than settling for the status quo. Gratomic will continue to establish itself as a multinational graphite supplier and aims to stake out a solid position in the electric vehicle battery sector," said Gratomic CEO Arno Brand in a statement.
Gratomic said the parties have agreed to enter a long-form agreement within six months under which Gratomic will commit to supplying 30% of its total production of its SG16 uncoated and 15% of its SG16 coated graphite material year-over-year for 60 consecutive months from the date that the company's Aukam Graphite Plant officially enters commercial production. Commerical production is defined as an output of greater than 51% of total production, which is estimated for the third quarter of 2022.
The first three-month commitment will be at a fixed price of US$2,700 per ton for graphite grade SG16 uncoated, and US$8,000 per ton for graphite grade SG16 coated. After the first three months of delivery, products will be purchased from Gratomic at prevailing market rates and according to Fastmarkets graphite price for graphite and subject to final weight and assays.
A provisional payment of 90% in advance will be made quarterly to Gratomic for the upcoming three-month delivery period based on planned production and prices on the date of payment. Final payment will be made when final weight, assays, and prices are known, according to three-month quotational period and no later than 90 days after delivery less 2.5% total invoice value as commission.
The processing plant at the company's Aukam Graphite project was built to accommodate an initial 20,000 tonnes per annum of output and was engineered in a modular design to accommodate rapid expansion over time. The over-engineering of the front and back end of the plant, allows the company to quickly increase capacity up to 45,000 tonnes per year, to accommodate the market increase in demand.
Product output is intended to be supplemented through the development of Gratomic's Capim Grosso graphite project in the Bahia State of Brazil.
Gratomic emphasized that no Preliminary Economic Analysis (PEA), Preliminary Feasibility Study, nor Feasibility Study has been completed to support any level of production. No mineral resources, or mineral reserves demonstrating economic viability and technical feasibility, have been delineated on the Aukam property.
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