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Peninsula Mines extends supply agreement for Madagascan large-flake graphite

Canadian company DNI Metals will annually supply up to 24,000 tonnes to Korea Graphite for Korean end-users.

Peninsula graphite sample
Peninsula intends to supply Korean end-users of high-technology graphite products

Peninsula Mines Ltd (ASX:PSM) subsidiary Korea Graphite Co Ltd has extended a large-flake graphite supply agreement with Canadian company DNI Metals Inc (CNSX:DNI) for on-sale to Korean end-users.

The amended agreement includes a commitment by DNI to annually supply up to 24,000 tonnes of flake graphite from its projects in Madagascar.

READ: Peninsula Mines progresses Korean graphite commercialisation strategy

Peninsula’s managing director Jon Dugdale said, “This amended flake-graphite supply agreement with DNI will assist the company to secure offtake agreements with Korean flake-graphite end-users.

“It will complement the company’s flake-graphite resource delineation and development plans in Korea.

“Peninsula has established strong relationships with Korean end-users looking to secure flake-graphite supply for lithium-ion battery anode production as well as for cutting-edge new technologies such as expandable graphite, a non-flammable building cladding/insulation product.”

Amended supply arrangements

The amended supply agreement includes DNI supplying Korea Graphite with minimum flake graphite production as follows:

- 500 tonnes of graphite production a month from July 1, 2019, for a minimum of four months, minimum total 2,000 tonnes;
- 1,000 tonnes of graphite production per month from January 1, 2020, for six months, total 6,000 tonnes; and
- 2,000 tonnes of graphite production per month from July 1, 2020, for a minimum of 24 months, total 48,000 tonnes.

The agreement is subject to Korea Graphite finalising one or more binding offtake agreements with Korean end users by July 1, 2019.

READ: Peninsula Mines completes SPP and placement, raising $886,000

Peninsula and DNI are discussing options to cooperate with respect to fast-tracking the development of DNI’s large-flake graphite projects in Madagascar.

Dugdale, who is also a director of Korea Graphite, said: “Madagascar has been producing high-purity, large-flake graphite for over 100 years and DNI’s large-flake graphite deposits are saprolite hosted and close to port, thus potentially low operating cost.”

DNI has two permitted deposits

DNI has two permitted, saprolite-hosted graphite deposits in Madagascar, 50 kilometres from the country’s main seaport of Toamasina.

The deposits, Vohitsara and Marofody, are less than 2-kilometres from the paved national highway.

DNI intends to develop the Vohitsara project, should the economic viability and technical feasibility be established.

READ: Peninsula Mines confirms flake-graphite exploration target with Gapyeong intersections

Korea Graphite has tenements and tenement applications in South Korea with fine to large and jumbo flake graphite identified.

Peninsula is progressing these and other projects to JORC-compliant resource definition with the objective of defining resources for scoping and feasibility studies.

This work has the potential to develop mining and flake graphite concentrate production for spherical graphite for lithium-ion battery applications and/or expandable graphite and other markets in Korea.

Peninsula is also engaged in advanced discussions with other flake-graphite end-users in Korea regarding feed for Li-ion battery anode manufacture and potentially large-flake graphite for refractories in the steel making industry.

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