Kibaran Resources MoU provides Great Expectations

THE BOURSE WHISPERER: Kibaran Resources (ASX: KNL) has signed a Memorandum of Understanding (MoU) with an un-named major European graphite trader for the sale of graphite material from the  Epanko deposit, located within the company’s Mahenge graphite project  in Tanzania.

 

Watch The Roadhouse’s interview with Kibaran managing director Andrew Spinks now.

 

Under the terms of the non-binding MoU, the mystery buyer proposes to purchase 10,000 tonnes of flake graphite concentrate per year, over a minimum 10-year period.

The unidentified suitor has completed its due diligence on both Kibaran Resources and the Epanko deposit, from which it has concluded the potential quality of graphite from the Epanko deposit is suitable to its needs.

Due diligence on the Epanko deposit included metallurgical test work and analysis of the recently completed Scoping Study, which was based on the maiden Inferred JORC Resource estimate of 14.9 million tonnes at 10.5 per cent total graphitic carbon (TGC), for 1,560,000 tonnes of contained graphite.

Kibaran boasted the key attributes of Epanko graphite to be:

–    Large and very large flake size – favourable distribution with 73.8 per cent in the plus-106 micron fraction and 21.6 per cent in the plus-300 micron fraction;

–    ‘Expansion’ capacity – material is considered suitable for ‘expanded’ graphite market;

–    High-grade – average of 10.5 per cent TGC in the Inferred JORC Resource; and

–    Low percentage of fines.

“The MoU agreement is a milestone event, providing Kibaran with significant independent endorsement of the quality and commercial appeal of the large flake graphite material identified at Epanko,” Kibaran Resources said in its ASX announcement.
 
“Importantly, it de-risks the path to development and commercialisation of the project, and the longevity of the agreement supports a strong long-term outlook for natural graphite demand – particularly for the large flake type.

“Both parties are now in the process of drafting a binding off-take agreement.”

Kibaran described its Dickensian benefactor to be a large sophisticated European graphite trader, which has been globally supplying end-users with natural flake graphite for various applications.

It has to date been sourcing graphite supplies mainly from China, however over the past two years, it has had potential new and additional sources of natural large flake graphite under investigation.

Following a worldwide review of graphite projects, Kibaran’s Epanko deposit in Tanzania was identified as a potential new source.