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Canada Carbon has signed a non-binding memorandum of understanding with Dunedin Energy Systems for the supply of 200 tonnes per year of Miller nuclear-purity graphite over a 10-year term.
Vancouver-based Canada Carbon (TSXV:CCB,FF:U7N1) is on track to supply the company’s Miller nuclear-purity graphite to a Canadian developer of small modular nuclear reactors.
On Wednesday (September 26), Canada Carbon announced it had signed a non-binding memorandum of understanding (MOU) with Dunedin Energy Systems for the supply of 200 tonnes per year of nuclear-purity graphite from its Miller project in Quebec over a 10-year term, with a floor price of US$40,000 per tonne.
“The company has now begun building its book of business as evidenced by this initial agreement with Dunedin Energy for this important initiative for Canada,” R. Bruce Duncan, CEO and director of Canada Carbon, said.
If the agreement is finalized, the proposed offtake represents over 13 percent of the company’s planned annual production of 1,500 tonnes per year projected in a preliminary economic assessment (PEA) completed in 2016.
Additionally, the estimated revenue per tonne under the deal represents a significant increase over the revenue per tonne used in the PEA. The costs for the production of nuclear-purity graphite estimated in the study were C$6,880 per tonne over the first five years of production.
The MOU comes just a few months after Canada’s Ministry of Natural Resources had outlined a road mapping process under the Energy Innovation Program to explore the potential for on- and off-grid applications for small modular reactor (SMR) technology in the country.
“The stakeholder-driven roadmap will be an important step in positioning Canada to advance next-generation technologies and become a global leader in the emerging SMR market,” Parliamentary Secretary Kim Rudd said at the time.
Commenting on the agreement with Canada Carbon, Peter Lang, CEO of Dunedin Energy Systems, said the company was looking to secure a supply of nuclear graphite required for the manufacture of its all-Canadian small modular reactor design. The company is focused on bringing nuclear energy to small and remote markets in Canada.
“We were delighted when our research team identified what we believe to be the world’s purest natural graphite is available to us from a domestic Canadian source,” Peter Lang, CEO of Dunedin Energy Systems, said.
Under the agreement, the developer will also have the option to purchase up to an additional 50 tonnes in any single year of the deal at a floor price of U$45,000 per tonne.
Looking ahead, both companies must achieve certain milestones in their business development activities in order to negotiate a definitive agreement.
Aside from the Miller project, Canada Carbon owns another two strategic graphite properties in Quebec, the past producing mine Asbury, located north of the Ottawa-Gatineau area, and the historic deposit Dun Raven in Thorne.
Before trading was halted, shares of Canada Carbon were trading at C$0.11. The company’s share price has increased more than 37 percent year-to-date.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Canada Carbon is a client of the Investing News Network. This article is not paid-for content.
