JOHANNESBURG (miningweekly.com) – ASX-listed graphite developer Hexagon Resources has signed a nonbinding memorandum of understanding (MoU) with China National Building Materials – General Technology (CNBM-GT) to purchase 30% of planned primary production from the McIntosh graphite project, in Western Australia.
The parties have also agreed to negotiate project finance, prepayment and other debt facilities to expedite project construction.
“Recent testwork reports have stimulated a considerable increasing interest in the McIntosh project from offtakers, financiers and investors,” Hexagon MD Mike Rosenstreich said on Friday, adding that customers were keen to cement strategic tie-ups with developers.
In terms of the MoU, CNBM-GT and Hexagon will negotiate for the Chinese company to purchase up to 29 500 t/y of various graphite concentrate products from McIntosh. The graphite concentrate will be sold at specified grades.
“A major advance is the improvement of our product specification since the completion of the prefeasibility study in May 2017. While pricing is and will remain confidential, we are confident of exceeding our recently updated basket price of $2 200/t of concentrate, subject to attaining our concentrate purity objectives,” Rosenstreich commented.
CNBM-GT and Hexagon further agreed to collaborate on ways of enhancing the flake concentrate quality with the aim of producing a premium expandable graphite and spherical graphite product from McIntosh graphite suitable for commercial markets.
Hexagon is progressing the feasibility study on the Stage 1 development of the McIntosh project, in the East Kimberley region.