Armadale Capital signs outline deal for production from planned Tanzania graphite operation

2019-02-20

Feb. 19, 2019 - Armadale Capital PLC said it has it has signed outline agreement with a Chinese company called Matrass Group, which wants to buy up 30,000 tonnes of graphite concentrate a year from its planned mine in Tanzania.

The memorandum of understanding envisages a five-year deal for output from the Mahenge Liandu operation, where environmental work has recently been completed.

The company said it is in discussions to find buyers for the remaining 19,000 tonnes of production a year.

It pointed out there is significant interest in high-quality graphite products, such as the concentrate expected to be generated from Mahenge Liandu.

By way of example, ASX-listed Black Rock Mining has agreed to a 205,000-tonne-year offtake deal for graphite unearthed from an operation close to the Armadale asset.

“This speaks volumes for the growing market demand for graphite from the region, which boasts some of the highest purity graphite concentrates globally and reinforces our confidence that binding offtake agreements will be secured for our entire 49,000tpa forecast production,” said director Nick Johansen.

Armadale will make a decision whether to mine the asset in the second half of this year after carrying out extensive preparatory work.

As such it has been advancing commercial discussions alongside “operational work streams”.