THE BOURSE WHISPERER: Kibaran Resources (ASX: KNL) has executed a Letter of Intent (LOI) with German company ThyssenKrupp Metallurgical Products GmbH, a subsidiary of ThyssenKrupp.
Kibaran said the deal will result in the development of an exclusive, long-term commercial agreement for the sale of an initial and minimum 20,000 tonnes per annum of the company’s natural flake graphite products in Russia, Korea and the EU 27 (excluding Germany, but including Turkey).
The term of the planned agreement is for 10 years.
ThyssenKrupp Metallurgical Products has committed to assist Kibaran obtain debt or equity funding for development of the graphite projects.
“ThyssenKrupp Metallurgical Products has also agreed to work with Kibaran to pursue project funding which will be a key component of our overall project Financing plan following completion of the Epanko deposit Feasibility Study,” Kibaran executive director Andrew Spinks said in the company’s announcement to the Australian Securities Exchange.
“Given its scale and international business standing, ThyssenKrupp’s involvement with Kibaran is a significant vote of confidence in our company and our ability to deliver.”
Kibaran explained the deal will account for approximately 25 per cent of the planned 40,000 tonnes annual graphite production from the company’s Epanko project in Tanzania and support for the future development of Kibaran’s Merelani project.
This means 50 per cent of the planned graphite production at Epanko is now supported by offtake and sales agreements, which places Kibaran boasted places it in an enviable position as the company plans to fast-track the project through a feasibility study.
Both parties are now working to advance the LOI to a formal commercial binding agreement.
“The signing of Kibaran’s LOI involving the sale of Kibaran’s graphite products is a further major milestone in the development of the Epanko deposit,” Spinks said.
“This LOI is the second major sales agreement and discussions continue with other targeted customers worldwide.
“We are extremely pleased to announce the beginning of our relationship with ThyssenKrupp Metallurgical Products.
“The signing of this LOI is further evidence that Kibaran is committed to delivering on our stated objective to be a major producer of graphite from Tanzania, East Africa.”