Junior graphite miner Triton Minerals Ltd(ASX: TON) appears to have hit the jackpot after securing a minimum US$2 billion 20-year binding off-take agreement for rights to supply graphite to Chinese company Yichang Xincheng Graphite Co. Ltd.
The stock has been in a trading halt since March 30 and has today opened up 69% higher to 56.5 cents on the strength of the news. The WA-based company is the holder of the world’s largest known combined graphite-vandium resource in Mozambique, Africa.
The deal will also see the Chinese company source graphite concentrate supplied by Triton from Madagascar, Malawi and Tanzania.
Notably the contract agreed with the Chinese buyer assures a minimum floor price of US$1,000 a tonne for graphite delivered, while the actual contract value may be far above that if future market prices make it so.
Investors will have to consider the potential for market prices to rise above the floor price given that graphite is an in demand commodity due to its use by global electronic and technology companies in manufacturing commonly used devices for global consumers. Graphite is also commonly required in industrial manufacturing of motorised vehicles and by the petroleum and chemical industries.
Triton has also announced an initial two-year agreement with global mining specialist AMG Mining to help develop the Triton Mozambique Graphite (TMG) project.
The next step is to get the TMG project into production and start earning a revenue stream if shareholders are to see their investment take another leg up.
The contract’s length and size certainly mean it would appear to have attractive prospects if able to deliver on its potential.
However, Triton remains a speculative play and the key to speculative investing is finding the Triton of tomorrow, not today!
Smart investors should consider The Motley Fool's TOP GROWTH STOCK FOR 2015 as an attractively valued alternative due to its established profit-making strength and growing global opportunities....
This tech stock is not the Motley Fool's top pick right now for nothing!
Simply click here for your FREE copy of a report all about it... BEFORE the investing crowd gets wind of the attractive valuation.... by Taboolaby Taboola
Sponsored LinksSponsored Links
Promoted LinksPromoted Links
More From The Motley Fool Australia 5 ASX stocks to buy cheap today Telstra, M2, TPG: Which telecom should you own? 202 million reasons not to buy BHP Billiton Limited or Rio Tinto Limited The best discounted shares to buy today Is now the perfect time to buy Santos Ltd, Macquarie Group Ltd and Woolworths Limited? 3 stocks to buy and 3 to avoid in a volatile market Could these 3 small caps be future ASX giants? Here's why you need to be ready for an ASX market crash 10 stocks to hold forever 7 blue chips stocks to buy in March
Motley Fool contributor Tom Richardson has no financial interest in any company mentioned. You can find him on Twitter @tommyr345
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The Motley Fool stands behind our products and our guarantee. If for any reason you are not 100% satisfied with your premium subscription, simply notify us within the first 30 days and you won’t pay a cent. Even after your first 30 days, if you change your mind, you will receive a pro-rated refund for the remainder of your subscription term. Automatic Renewal
By taking up this offer, you will also be enrolled in our auto-renewal program.
Don’t worry though – you’re not locked in, and can cancel your auto-renewal at any time before each ‘anniversary’ date without question or penalty. It’s just our way of making your ongoing subscription easier, and thanking you for your membership..
×
Dear Fool:
We love you, but we need to talk. It's your browser. Internet Explorer 8 (or older) has known security flaws, and may not display all of our Foolish website's features – or those of other websites, for that matter. We encourage you to use the following link to update your browser so that you can more safely browse the Web (http://browsehappy.com/).
Foolishly,
The Motley Fool Team
TON Price at posting:
56.0¢ Sentiment: Buy Disclosure: Held
(20min delay)