(Alliance News) - Natural resources firm Armadale Capital PLC on Thursday said it has agreed on offtake deal for graphite produced in future from Tanzania's Mahenge Liandu project.
The memorandum of understanding has been signed with Chinese technology firm CoolRU Information Technology.
Armadale will deliver 5,000 tonnes of graphite concentrate a year for five years initially, at a price to be agreed based on the Chinese benchmark for the quality of graphite produced.
The latest offtake, Armadale said, takes the total tonnage of production under an offtake memorandum of understanding to 35,000 tonnes a year, some 71% of targeted annual production from Mahenge Liandu.
The company is in talks with a "major organisation" for another offtake which would cover the remaining production.
Director Nick Johansen said: "Securing this MOU is another important step in the commercialisation of Mahenge Liandu. We now stand with over 70% of planned annual graphite production under offtake MOU and expect to secure further offtake agreements, which will cover all planned production.
"This news comes at a time when the company is accelerating its transition from explorer to emerging graphite producer, whilst multiple important workstreams related to completion of the project's feasibility study are underway. Armadale will, as recently demonstrated, provide updates to market as each important work-stream is concluded."
Armadale shares were 0.8% lower on Thursday in London at a price of 2.18 pence each.
By George Collard; georgecollard@alliancenews.com
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Armadale Capital (ACP)