Australian explorer Uranex has hit a key milestone, securing an agreement for the sale of 100,000 tonnes of graphite per annum for the next five years.
A memorandum of understanding for off-take signed with the Chinese state-owned enterprise (SOE) SINOMA also provides for an additional five year option.
The announcement caused the share price of Uranex to jump from 19 to 22 cents yesterday.
Uranex owns the Natchu graphite resource in Tanzania, a site 200 kilometres from the nearest port of Ntwara.
Uranex chairman Peter Sarantzouklis told Australian Mining the resource is high quality, with product grading intended to be in the range of 90 to 95 per cent Total Graphitic Carbon (TGC).
“The resource is very close to the surface, you can literally dig it up with a backhoe,” he said.
Sarantzouklis said he was extremely pleased with the new agreement, and thanked SINOMA on behalf of the board of Uranex.
“With a significant target resource established, excellent metallurgical results to date, and today’s announcements of an MOU for off-take with a major partner, Nachu continues to confirm that it is a world class project in every sense,” he said.
The drilling program at Nachu has used 54 RC drill rigs and 13 diamond rigs to assess the resource.
Uranex expects the Nachu resource to be JORC compliant by the end of the year, when they will be able to release results for the inferred resource.
The target estimate at 5 per cent cut off is 115 million tonnes of graphite at 6-12 per cent.
A large portion of the resource, around 45 per cent, is expected to be premium grade large to jumbo flake graphite, suitable for manufacture of advanced batteries for electric cars and bikes, and other technology focussed industrial uses.
Uranex expects their operating cost to be $300 per tonne, producing 200,000 tonnes per year.
SINOMA is one of the China's largest research and development companies for non-metallic products, with over 100,000 employees.