London-listed Armadale Capital has signed a memorandum of understanding (MoU) towards a proposed offtake agreement with Chinese company Datong Resources.
The proposed offtake is for 25 000 t/y of graphite concentrate produced from Armadale’s Mahenge Liandu project, in Tanzania.
The MoU is valid for an initial term of five years at a price based on the Chinese benchmark for the quality of the graphite produced.
Armadale had also signed MoUs with Matrass group for 30 000 t/y and with CooIRU for 5 000 t/y, adding up to a total of 60 000 t/y under MoU agreement.
This represents 122% of the company’s average targeted production of 49 000 t/y.
However, the current mine plan is based on only 25% of the total resource.
Armadale director Nick Johansen on Friday said the ability to secure offtake MoUs of this magnitude demonstrated the robust nature of Mahenge Liandu and completed an important step as the company proactively progressed the mine’s development.
Meanwhile, the company is working on a definitive feasibility study for the project.