The strategic offtake agreement, with a United States industrial specialist in high-grade graphite including coated spherical purified graphite or CSPG, downstream processing and marketing, is for a five-year period.
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I’m Ashton Addison for Investmentpitch Media
South Star Mining has entered into a Memorandum of Understanding for the offtake of 20,000 tonnes of natural flake graphite concentrate.
The strategic offtake agreement, with a United States industrial specialist in high-grade graphite including coated spherical purified graphite or CSPG, downstream processing and marketing, is for a five-year period.
This follows the recently announced agreement to provide 4,000 tonnes of natural flake graphite, over four years, to a European industrial specialist.
For competitive reasons, the terms and conditions of both agreements are confidential.
The company, through a series of wholly owned subsidiaries, owns 100% of the Santa Cruz Graphite Project.
The Santa Cruz Graphite Project, located in Southern Bahia, is the first of a series of battery metals projects that will be put into production.
Brazil is the second-largest graphite-producing region in the world with more than 80 years of continuous mining.
The Santa Cruz project is being developed in a phased approach.
Phase 1 operations for the 5,000 tpy pilot plant operations are fully licensed, and the Company is preparing to start construction in September 2021 with commercial production targeted for Q4 2022.
Phase 2 operations will represent a larger scale concentration plant currently planned to produce between 25,000 to 30,000 tpy of concentrate.
The sizing of Phase 2 plant could be increased depending on the successes of the Phase 1 operations, ongoing development of commercial relationships, and market conditions.
Richard Pearce, President and CEO, stated: “With this latest offtake agreement we have the majority of our production sold for the Phase 1 operations and a great start on Phase 2 operations. The tonnages associated with this agreement will mainly be processed into CSPG for the growing lithium-ion battery markets. The recent offtake agreements reinforce the high-quality nature of the deposit that create value for our Partners and ensure that the future of Santa Cruz is very bright with a diversified product line across a broad array of market sectors. I also think the recent agreements reinforce the phased approach to production, which underscores risk management and effective allocation of capital. This is another important achievement in moving the Project from development into production in 2022 and then scaling it up for Phase 2 operations.”
Benchmark Intelligence forecasts natural flake graphite to be in a supply deficit starting in 2025.
On January 29th, Fundamental Research’s Head of Research, Sid Rajeev, maintained his buy recommendation, with a highly speculative rating, giving the company a valuation of $0.52, a premium of 420% to the $0.10 price on the day the report was issued.
The shares are currently trading at $0.21.
For more information, please visit the company’s website, www.SouthStarMining.ca, contact Dave McMillan, Chairman, by email at DaveMc@telus.net.
Investor Relations is handled by Cathy Hume, CEO of CHF Capital Markets, who can be reached at 416-868-1079 ext 251 or by email at cathy@chfir.com.
I’m Ashton Addison for Investmentpitch Media
