Gratomic Inc said it has signed a Memorandum of Understanding (MOU) with Millennium Metals Ltd (TM2) and an undisclosed third party (the buyer) to supply graphite over 60 consecutive months.
In a statement, Gratomic said the supplying will begin upon commencement of commercial production at its Aukam Graphite project in Namibia.
"Bringing a buyer into the partnership between Gratomic and TM2 continues to build our vision of creating opportunities and becoming a lead player in the electric vehicle battery sector, with the right partners," said Gratomic CEO Arno Brand.
READ: Gratomic says it has initiated preliminary engineering work at its Capim Grosso project in Brazil
Gratomic and TM2 forged a strategic partnership with the intention of being the first to industrialize graphite as a commodity and signed an indicative term sheet on February 8, 2022, to set the groundwork for the current MOU.
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.
Gratomic said the parties have agreed to enter into a long-form agreement within six months under which Gratomic will commit to supplying 600 tons per month of graphite SG16 Uncoated or other grade in the initial three months of supply. Gratomic also will supply 1,200 tons per month of graphite SG16 Coated or Uncoated or other grade after the initial three-month period 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.
Gratomic said the TM2 Indicative Term Sheet signed on February 8, 2022, defined 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.
A provisional payment of 70% 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 30 days after an inspection in a bonded warehouse. Payments will be made directly by the Buyer to Gratomic, and a shared profit contract will need to be established with TM2.
The processing plant at the company's Aukam Graphite project was built to accommodate an initial 20,000 tonnes but the company can increase capacity up to 45,000 tonnes per year. Product output is intended to be supplemented through the development of Gratomic's Capim Grosso graphite project in the Bahia State of Brazil.
Petur Georgesson, TM2's CEO, added: "We intend on becoming the landmark market for technology metals globally, with full coverage of the periodic table and full transparency. We want more people to feel empowered by this new and unique opportunity to invest in metals. It's a new level of freedom and democracy both for investors and producers to get access to a direct trading market without any intermediaries and with the full transparency and accessible information regarding the sustainability requirements demanded by the public."
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