Battery Metals expects cash to flow from new graphite plant in 2019
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Graphite play Battery Metals expects cash to start flowing in 12 months after a new Mozambique plant is commissoned in November.
The company told shareholders it was making rapid progress on key construction items and supply contractions with site civil works at its Montepuez Project in Mozambique well underway.
Battery Metals (ASX:BAT) is forecasting first graphite exports in the March quarter next year.
“With recruitment well underway, offtake [future sales] agreements in place, early earthworks happening and processing plant mobilising to site, the team has set a cracking pace and used the wet season to lock down all key equipment supply contracts and get ahead on services and early works,” MD David Flanagan told investors.
“We are looking forward to generating cashflows from the March quarter 2019.”
Momentum behind BAT has been growing over the past couple of months. The company has signed four sales agreements totalling 80 per cent of its future production.
The news flow sent its shares rocketing to 11c in late January. The stock was up slightly at 8.2c on Wednesday morning.
The graphite plant will complement BAT’s Montepuez graphite flake project, expected to generate 50,000 tonnes per year.
So far, the initial temporary construction camp has been installed, water dams built and filled, crushing circuit has arrived and site civil works have been underway.
BAT estimates the global graphite market to be as much as 2.5 million tonne per year with predictions it will grow to 4 million tonnes within six years.
That’s off the back of expected growth in demand for lithium-ion batteries which require graphite for anodes.