VANCOUVER (miningweekly.com) – Madagascar-focused graphite project developer DNI Metals has signed a binding supply agreement with ASX-listed Peninsula Mines’ subsidiary Korea Graphite to supply up to 24 000 t/y of flake graphite, the company announced on Monday.

The deal is subject to Korea Graphite finalising offtake agreements with Korean end-users, starting during the fourth quarter. The binding supply agreement is seen as a key precursor to establishing binding offtake agreements with Korean flake-graphite end-users.

Further, under a cooperative memorandum of understanding signed between the two parties in August last year, Korea Graphite and DNI will continue to discuss potential development cooperation in order to fast-track DNI's Madagascar flake-graphite projects, including potential for investment in a processing plant and/or investment in DNI’s new graphite property.

Peninsula has established strong relationships with Korean end-users that are looking to secure flake-graphite supply for lithium-ion battery anode production as well as for cutting-edge new technologies such as expandable graphite, a non-flammable building cladding/insulation product.

CSE-listed and Toronto-based DNI owns two permitted, saprolite-hosted graphite projects in Madagascar, namely Vohitsara and Marofody, which are located 50 km from the country's main seaport. These projects are adjoining, with the bulk of their respective mineralisation located between 2 km and 4 km from the paved national highway that bisects the tenement area.

DNI intends to develop both the Vohitsara and Marofody projects, should the economic viability and technical feasibility be established through future preliminary economic assessments and mining studies.

DNI also has a graphite wholesale business, in which it buys and sells high-quality graphite. This business has shown a steady increase in volume over the past year, according to DNI.