Mineral Commodities (MRC) has signed an agreement with Gold Terrace to farm into the Munglinup graphite project in Western Australia.
The Munglinup graphite deposit is located 4km north of the town of Munglinup and 42km east of the Ravensthorpe nickel mine. It has a high grade measured and indicated JORC compliant mineral resource of 3.625Mt at 15.3 per cent graphite for 554kt of contained graphite.
The joint venture agreement allows MRC to acquire 51 per cent in the project.
MRC will also be able to earn 90 per cent of the project for $4 million in cash sourced from operating cash flows, the issue of 40 million MRC fully paid ordinary shares, and the completion of a feasibility study within two years of executing the farm-in and joint venture agreements.
Under the agreement, Gold Terrace can also divest its remaining 10 per cent to allow MRC to obtain 100 per cent ownership of Munglinup.
MRC executive chairman Mark Caruso said he was pleased have secured the project as the company believes it is located in a Tier 1 operating jurisdiction.
He added that Munglinup is consistent with MRC’s high grade industrial mineral operating profile and compliments its Tormine mineral sands project in South Africa.
“Munglinup presents an excellent near term development opportunity to enter the growing battery commodities market at a time of future demand and production uncertainty, mainly due to unfavourable mining industry regulatory changes in Tanzania and Mozambique and tightening of Chinese supply,” he said.
“MRC will be looking to bring Munglinup into production as soon as possible to take advantage of a looming coarse flake graphite supply shortage.”