TORONTO (miningweekly.com) – Project developer Alabama Graphite (AGC) on Monday revealed that it had signed six nondisclosure agreements (NDAs) with manufacturers of equipment for the US Department of Defence (DoD).

The agreements were meant to spur discussions and the due diligence evaluation of samples of AGC’s US-sourced and US-manufactured coated spherical graphite (CSPG) used in lithium-ion (Li-ion) battery applications – both for primary and secondary Li-ion batteries – specifically for DoD use.

The DoD strongly encouraged its contractors and suppliers to source their input materials from within the US, and as a result, AGC advised several of these DoD battery manufacturers had sought out AGC as a potential future supplier of CSPG.

“Without exception, all of the DoD contractors and suppliers we have entered into NDAs with have expressed that sourcing input materials from within the US is more important than ever,” AGC president and CEO Donald Baxter stated.

Alabama advised that the six NDAs were in addition to the multiple agreements it had entered into with US-based entities that were not affiliated with the US DoD.

AGC is focused on becoming a US-sourced green-energy supply chain producer for the US government and defence sectors’ battery solutions providers.

Baxter added that there was much work to be done, pending the initiation and completion of a positive feasibility study, followed by the financing and construction of a graphite mine and downstream CSPG processing and production facilities. "[However], I believe that AGC will be a viable domestic upstream supply option for these and other American Li-ion battery manufacturing entities,” Baxter added.

A preliminary economic assessment of the Coosa project, in Alabama, demonstrated that it had strong economics and excellent potential to become a near-term producer of high-value, ultrahigh-purity specialty graphite products for the burgeoning American green-energy markets.

The project had indicated resources of 78.49-million tonnes grading 2.39% graphitic carbon and inferred resources of 79.43-million tonnes grading 2.56% graphitic carbon.

AGC’s strategy entailed exclusively targeting the oxide portion of the Coosa project’s mineral resource and, subsequently, diverting 100% of primary graphite production to secondary-processed, speciality high-purity graphite using the company’s proprietary low-temperature purification process.

Analysts expected tighter supply conditions for higher-value grades of graphite during the second half of the year following destocking in China, putting some upward price pressure in the market. However, increased output within China was likely to delay a gradual recovery in prices until the second half.

Alabama's TSX-V-listed stock on Monday jumped more than 14% after the news release to C$0.16 apiece.