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LONDON (Alliance News) - Shares rose in Armadale Capital PLC on Tuesday as it signed a memorandum of understanding for an offtake agreement with Chinese mining company Matrass Group for the Mahenge Liandu graphite project in Tanzania.
Shares in the natural resources investment company were up 13% at 1.13 pence on Tuesday.
The memorandum was signed for the proposed offtake of 30,000 tonnes per annum of graphite concentrate produced at the project for an initial five-year term at a price to be eventually agreed.
A test work programme, which will look to progress the memorandum to an actual binding agreement, is planned to start before the end of the first quarter of 2019.
Armadale said it is currently in discussions with potential customers for the remaining 19,000 tonnes per annum of production ongoing.
"I am delighted to report that our commercial efforts have been rewarded with this offtake MOU for 60% of our average target annual production with the Matrass Group," said Director Nick Johansen.
"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," Johansen added.
In addition, feasibility study drilling for Mahenge Liandu has been completed, with further activities expected to recommence in the coming weeks following the end of the Tanzanian wet season.
