Graphite explorer Triton Minerals has announced a major offtake deal which will see $255 million invested into their Nicanda Hill operation.
Chinese equity firm and resources house Shenzen Quianhai Zhonglin Group (SQZG) have proposed a funding package of 50:50 debt to equity, with 200,000 tonnes of graphite to be produced over 10 years at Nicanda Hill in Mozambique.
Formal due diligence on the deal will be completed no later than 30 June 2015.
Triton managing director Brad Boyle said this was an outstanding achievement for Triton.
“This letter of intent signifies an important step towards securing complete and comprehensive funding for the development of our flagship Nicanda Hill deposit,” he said.
“We are delighted and privileged to be associated with SQZG who are looking to align themselves with Triton as a long term strategic partner, a cornerstone investor, financier and off-take partner.”
SQZG managing director Chen Shaogang said Triton was potentially the world’s largest and lowest cost graphite producer.
“As a result of our detailed analysis of the graphite supply business we have identified Triton as the premier future developer and producer,” he said.
“Considering various aspects such as resource quality, technical expertise, rapid and effective project progression, board and management team determination and resolve, we view the Nicanda Hill deposit as a justifiably world class deposit and Triton as the industry leader.
“Triton holds a key asset in the graphite and vanadium world.”
Triton will provide graphite to SQZG at the fixed price of US$875 per tonne, with purity at not less than 90 per cent and moisture of one per cent.
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