THE BOURSE WHISPERER: IMX Resources (ASX: IXR) has signed a Memorandum of Understanding (MoU) with China-Base Ningbo Foreign Trade Co. Ltd. for the future sale of graphite concentrate from the company’s Chilalo project in Tanzania.
The MoU involves a binding offtake agreement upon the completion of appropriate levels of feasibility study on the project and anticipates supply of at least 25,000 tonnes of Chilalo graphite concentrate per year for five years.
IMX flagged China-Base Ningbo has said it would like to purchase a larger quantity of graphite, however the company indicated its preference for its offtake agreements to be diversified across multiple parties.
The MoU stipulates the price to be paid by China-Base Ningbo will be linked to market prices for graphite and also requires that a mechanism be put in place for setting a floor price or fixed price.
China-Base Ningbo has also agreed to deal exclusively with IMX when it comes to purchasing graphite for the term of the MOU.
The two parties have agreed to discuss opportunities for China-Base Ningbo to play a further role in other key aspects of the Chilalo project, including funding, procurement and logistics.
“This MoU reflects the underlying strengths of the Chilalo project and builds on the strong early stage interest expressed by a number of parties,” IMX CEO Phil Hoskins said in the company’s announcement to the Australian Securities Exchange.
“China-Base Ningbo is a sizeable trading company with significant access to end users of graphite and we look forward to working with them to move towards a binding agreement.
“With this MoU in place, coming on the back of recent initial metallurgical testwork results and a maiden mineral resource estimate, we remain firmly focused on the rapid development of our Chilalo project.”
IMX recently announced a maiden high-grade Mineral Resource comprising 7.4 million tonnes grading 10.7 per cent Total Graphitic Carbon (TGC) for 792,000 tonnes of contained graphite (at a >5% TGC cut-off).