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Hexagon Resources to regain full ownership of McIntosh project after MinRes withdrawal

The change in ownership will include all data and samples from MinRes’ work.

Hexagon Resources Ltd - Hexagon Resources regains full ownership of McIntosh project after MinRes withdrawal
Hexagon’s aim is to achieve near term profitability

Hexagon Resources Ltd (ASX:HXG) will regain 100% interest in its McIntosh project tenements and all high-quality data and samples generated from its partner’s work after Mineral Resources Limited (ASX:MIN) posted notice of its intention to withdraw from the McIntosh Joint Venture effective October 31, 2019.

The Perth-based graphite developer plans to continue its evaluation work in preparation for the rebalancing of the graphite concentrate supply-demand situation forecast to occur in 3-4 years’ time.

Immediate-term cashflow opportunity

Since mid-2017, Hexagon has focused on developing a market for its graphite concentrate material as well as gaining a strong understanding of the downstream processing industry.

This work has given the company a detailed understanding of the technical attributes of flake graphite and the specific target end-markets for the various downstream transformations.

In the current market dynamic for graphite concentrate, management has grown in its conviction that downstream processing is more financially attractive in the immediate term.

Shifting battery metal industry trends

MinRes originally entered the JV to increase its exposure to battery materials with the inclusion of graphite, as well as to create additional WA contracting opportunities.

It has determined any future investment in the McIntosh project would not meet its minimum investment return threshold, with consideration of other significant planned projects requiring development capital.

The company will write off its investment in the MJV of less than $5 million this financial year.

Quick facts: Hexagon Resources Ltd

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ASX:HXG
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