Bass Metals Limited (ASX:BSM) has signed a sales agreement for 50% of its forecast stage 1 flake graphite concentrate production of 6,000 tonnes per annum (tpa) in Madagascar.
The company’s shares closed circa 17% higher on Tuesday, at $0.014.
Possehl Erzkontor GmbH & Co, based in Europe, has agreed to purchase 3,000 tpa of graphite concentrates to be produced from the company’s Graphmada Large Flake Graphite Mine.
The contract is for a period of three years from January 2018.
Bass and Possehl has agreed on the pricing for the concentrates based on fully transparent end-user demand.
Possehl will earn a 5% commission on all sales through its European distribution network, paying Bass directly on 30-day payment terms, thus minimizing Bass’ sales and logistics costs into Europe.
The high value concentrates will be sold predominantly into the European refractories, foundries and crucibles sectors, were Graphmada’s concentrates have the potential to attract premium pricing.
Last month, Bass successfully raised circa $3.8 million via a placement and an accelerated entitlement offer at an issue price of $0.011 per share.
This completed the first stage of the company’s $6 million equity raising.
Bass is continuing to make progress towards refurbishing the Graphmada mine with the aim of re-commissioning this calendar year as a profitable producer of high purity graphite concentrates.
The Graphmada mine has mining permits for 40 years in place, containing four large flake graphite deposits.
The producing mine is currently being upgraded to 6000 tonnes per annum.
Bass is planning to expand production to greater than 20,000 tonnes per annum of graphite concentrate by late 2018.