PERTH (miningweekly.com) – ASX-listed Evolution Energy Minerals has inked a binding offtake agreement with China’s Yichang Xincheng Graphite Co (YXGC) for the sale of 30 000 t/y of coarse flake graphite from its Chilalo graphite project, in Tanzania, for the first three years of operation.
“We are delighted to sign this cornerstone offtake agreement with YXGC, which significantly derisks the project financing of our Chilalo project. The agreement is the culmination of a significant amount of work that we have undertaken with YXGC over many years and is testament to the strong relationship and mutual respect we enjoy with YXGC,” said Evolution MD Phil Hoskins.
“YXGC is internationally renowned as a leading manufacturer of expandable graphite and high-value graphite products and the Company believes that its partnership with YXGC is critical to securing the finance for development of Chilalo.
“Furthermore, this offtake agreement is part of a broader collaboration to combine Chilalo’s high-quality product with YXGC’s industry-leading technology as part of a downstream operation to supply western customers with expandable graphite, graphite foil and a multitude of other high-value products.”
Evolution and YXGC have worked closely together over a long period of time, with Chilalo’s graphite having been the subject of extensive product qualification with YXGC since 2015.
A 2020 definitive feasibility study into the project, based on a yearly throughput of 500 000 t to produce around 50 000 t/y of graphite, found that the project would require a pre-production capital investment of $87.4-million.
The study estimated a post-tax net present value of $331-million and a post-tax internal rate of return of 36%, with Chilalo anticipated to generate average yearly earnings before interest, tax, depreciation and amortization of $74-million over its 18-year mine life.