Triton Minerals Up 20% With Strategic Partnership

Graphite miner and producer Triton Minerals Ltd [ASX:TON] issued a trading halt on Wednesday ‘pending an announcement in relation to a strategic partnership and funding’.

Today it was announced that Jinan Hi-Tech, a major State-Owned Enterprise involved in building and infrastructure in China, has agreed to invest $19.5 million into Triton to secure the 19.3% stake in the company originally acquired by Shandong Tianye Mining.

Within the first hour of today’s trading, with the trading halt having been lifted, Triton’ Minerals share price climbed 20%. Investing forums are blowing up on the news, putting this stock on the hot topics list.

At time of writing, Triton shares are trading at six cents apiece.

Related: Have you heard of the new super material Unbreakable ‘nano metal’. Australia’s most valuable export?

China after a strong graphite supplier

The deal involves Jinan receiving AU$11 million worth of shares at 6.2 cents apiece, with an additional AU$8.5 million of 4.1 cent shares. With these two transactions, Jinan will now hold over a third of Triton’s shares — a 34% stake.

While the deal is subject to Triton’s approval, and will require a meeting with shareholders to vote on approving Jinan’s greater than 20% stake, the company seem approving of the acquisition.

Triton’s managing director, Peter Canterbury, says of the Strategic Placement:

Through this agreement we have now secured the cornerstone equity component of the development funding with a commitment to finalise the debt funding for the Ancuabe Graphite Project’.

This project was confirmed to be a high quality, high margin graphite project with a long life, according to the Definitive Feasibility Study conducted in December 2017.

In their most recent general meeting, Triton identified China’s demand for imported high purity, large flake graphite as Ancuabe’s target market. This makes Jinan’s interest all the more understandable, for it gives them equal board representation in this graphite producer.

What this means for Triton going forward

As explained in the announcement, Jinan are particularly interested in what Triton has to offer to the Flame Retardant Building Products market, which is emerging in China as we speak.

MD Peter Canterbury says he ‘can see the massive potential of the Ancuabe Graphite Project to supply the flame-retardant building industry’. Having such a core focus in regards to large stakeholders no doubt looks appealing to investors. And with their share price giving this company a right to be called a penny stock, it’s no mystery why today’s announcement is attracting serious investor attention.

Of course, there is still the underlying question of why Shandong agreed to sell their stake in the company. But a quick Google search will tell you that one of this company’s subsidiaries, Shandong Tyan Home, is currently under severe scrutiny by investors for their deteriorating, yet unexplained, financial position.

Perhaps letting go of Triton was a necessary loss for Shandong to clean up their high-interest mess.


Ryan Dinse,

For Money Morning

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Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle.

Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.

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