Special report: Emerging graphite producer Triton Minerals has locked in supply deals for half of the annual graphite concentrate that will be produced from its Ancuabe mine in Mozambique.

Triton (ASX:TON) has signed a second binding off-take (or sales) agreement – this time with major Chinese graphite company Qingdao Chenyang Graphite.

This latest deal comes close on the heels of an initial binding agreement with Chinese processor and distributor Qingdao Tianshengda Graphite.

Investors welcomed the news, pushing shares up 4.2 per cent on Wednesday to a peak of 7.4c.

Chenyang is one of the largest graphite companies in the Qingdao area of Shandong Province.

The heavyweight is focused on graphite processing and trading, producing advanced graphite products for customers in China, Japan and Korea.

Five-year deal

This latest sale agreement covers up to 16,000 tonnes a year of Ancuabe graphite concentrate for at least five years.

It also includes a seller option for a further five years, with a minimum quantity of 10,000 tonnes per annum, across a range of graphite product specifications.

“Securing binding agreements for up to 50 per cent of forecast annual production with experienced graphite producers in Chenyang and Tianshengda demonstrates the success of Triton’s product marketing strategy and the demand for large flake, high purity graphite in the Chinese market,” managing director Peter Canterbury said.

“In addition, this external support for the Ancuabe graphite project provides strong momentum for our engineering, procurement and construction, financing and development objectives, which are on-track to enable an investment decision in 2018 and first production from Ancuabe in late 2019.”

Triton continues to receive strong expressions of interest for off-take and is continuing to progress negotiations with other parties.

The company recently raised $5.2 million in cash after tying up full ownership of its graphite projects in Mozambique.

Owning 100 per cent of the Mozambique projects will greatly assist Triton in securing mining approvals, off-take and financing for Ancuabe.

The project is in the same neighbourhood as the already operating Balama and Ancuabe graphite mines owned respectively by Syrah Resources (ASX:SYR) and GK Ancuabe Graphite Mine, a subsidiary of German company AMG Graphit Kropfmuehl GmbH.

Triton’s project is located in the district of Ancuabe, in Mozambique’s Cabo Delgado province, which is known to host large and high-quality graphite deposits.

Around 32 per cent of the graphite in Triton’s deposit is jumbo flake and about 59 per cent is large flake, which attracts higher prices over smaller flake graphite.

Historically China accounted for about 70 per cent of coarse flake graphite supply.

But China’s coarse flake graphite reserves have largely diminished and supply is also under threat by environmental restrictions forcing mine closures.


This special report is brought to you by Triton Minerals.

This advice has been prepared without taking into account your objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice.

If this advice relates to the acquisition, or possible acquisition, of a particular financial product, the recipient should obtain a disclosure document, a Product Disclosure Statement or an offer document (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product.