The company has been engaged in building a foothold in the North American market and material processing industry for nearly two years, with Hexagon managing director Mike Rosenstreich referring to its activities as “bceing a doorbell to the US battery supply chain”.
This appears to have resonated with key stakeholders and resulted in management executives spending significant time in negotiations and evaluation of several opportunities.
New substantial holder
Investors have also noticed as seen in the 6.99% stake in Hexagon that UBS Group AG and its related bodies have recently acquired.
The Swiss financial services company obtained more than 20 million shares, becoming a substantial holder.
Commercialising downstream business
For the past two years, Hexagon has focused on commercialising a downstream business to become the ‘natural customer’ for its own upstream graphite concentrate materials.
Technical work on upstream mineral resources is being undertaken to better understand where efficiencies and strengths can be exploited.
The company confirms there will be a delay to the progress of the McIntosh joint venture with Mineral Resources Limited (ASX:MIN), with the proposed JV structure still a matter of discussion between the JV parties.
Work at Hexagon’s Halls Creek Gold Project is planned to start during this field season after access clearance from native title claimant groups.
The project has a growing value to Hexagon in the current high-gold price environment, despite it not being a core asset.
Downstream manufacturing offers higher margins than ‘mine-based’ processing
During discussions regarding the development of its downstream graphite business, Hexagon’s potential strategic funding partners have expressed a clear desire that the company expand its focus.
This evolution in strategy would present exciting complimentary opportunities for Hexagon to access within its downstream commercialisation strategy as well as fast tracking towards cashflow.
The company has determined downstream manufacturing of finished high value products offers higher margins than primary ‘mine-based’ processing into unfinished industrial-mineral concentrates.