Today, Walkabout Resources Ltd [ASX:WKT] executed the formal signing of the first binding offtake term sheet with Inner Mongolia Qianxi Graphite or IMQG, a Chinese graphite producer.
At time of writing, Walkabout Resources’ share price is trading at 16 cents, up 6.45%.
The agreement secures up to a 50% sale of scheduled yearly production for the next three years. But offtake discussions are still ongoing with end users, upgrading facilities and traders.
Walkabout Resources seizes graphite market excitement
The agreement with Mongolia shows encouraging recognition for Walkabout’s product and development timeline in the graphite market.
According to today’s announcement, the binding terms are set to carry a ‘minimum of 10,000 tonnes and a maximum of 20,000 per annum of flake graphite to IMQG for a period of three years following the commencement of production.’
There’ll be a final offtake agreement which will replace the term sheet. At this stage, the fine points of the terms of agreement are still commercially sensitive.
Walkabout Resources production outlook for 2019
Executive chairman of Walkabout Resources, Trevor Benson commented on the offtake agreement:
‘Signing the first binding offtake term sheet is a significant milestone for walkabout. It’s clear that end-users and upgrade facilities who have recognised our premium product, can now see a more definite timeline to production. This has prompted them to take action to secure supply from what is Africa’s standout large-flake graphite deposit.
‘The agreement is the result of months of testwork and discussions and we are delighted to be able to make this announcement so quickly after releasing the upgraded reverse and the improved DFS.’
Shareholders should keep an eye out for further share updates within the market, as Walkabout Resources is continuing to keep discussion open on additional offtake agreements — and this could impact the company’s share price.
So, investors may want to keep an on stocks like Walkabout Resources, as the emerging graphite market grows.
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