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Next Graphite (OTC PINK: GPNE), a graphite exploration and development company in the African Republic of Namibia, announced the signing of a Farm Out agreement with CKR Carbon for its Aukam graphite project. According to the press release: Under the terms of the Agreement Next Graphite will allow CKR to earn up to 63% interest …
Next Graphite (OTC PINK: GPNE), a graphite exploration and development company in the African Republic of Namibia, announced the signing of a Farm Out agreement with CKR Carbon for its Aukam graphite project.
According to the press release:
Under the terms of the Agreement Next Graphite will allow CKR to earn up to 63% interest in the License and the Project upon completion of (i) investing $1.1 million in cash; or (ii) the completion of the plant and infrastructure set up; and (iii) government authorization to begin commercial operations. CKR has spent $400,000 to date on the project.
The Farm Out agreement also specifies that CKR make quarterly payments for a total of $180,000 ($85,000 paid to date) during the Farm-Out period, which began on June 8, 2015 (on signing of the Joint Venture Agreement) and ends when CKR has earned up to 63%, as outlined above. Should the Farm-Out Period need to be extended beyond the time in which CKR has invested its $1.1 million, Next will continue to be paid $25,000 per Quarter [or pro-rata for a partial Quarter] until (i) the completion of the plant and infrastructure set up; and (ii) government authorization to begin commercial operations. In addition, in the case where the Farm-Out period is extended, and the revenue stream from graphite sales is less than $100,000 per month, CKR will loan Next Graphite $25,000 per quarter.
In the event any material is sold at any time, any realizable amount from net proceeds of sale of the material shall be distributed to the parties in the following proportions: 63% to CKR and 37% to Next. The JV currently has a Letter of Intent to supply up to 5,000 metric tonnes of graphitic material grading between 40 and 50% Cg (carbon as graphite) over the course of the next year (see Next Graphite News Release dated March 24, 2016).
“The signing of a comprehensive Farm Out agreement with our JV partner is an important step in defining our milestones for the next 12 months,” said Cliff Bream, CEO of Next Graphite. “Our upcoming joint activities include a feasibility study to determine the extent of graphitic material we have underground, and continuing to add material to our stockpile, first for upcoming sales of pre-processed graphite and then for sale as processed graphite once our plant is up and running. We are entering a very active period in our project, and we are excited.”