Renascor has agreed to supply graphite concentrate to China’s Qingdao Chenyang Graphite, which produces a range of graphite products for customers in Asia.
Renascor Resources (ASX:RNU) has signed its first offtake memorandum of understanding (MOU) for graphite production at its Siviour project in South Australia, the company announced on Thursday (April 26).
Australia’s Renascor has agreed to supply graphite concentrate to China’s Qingdao Chenyang Graphite, which produces a range of graphite products for customers in Asia.
“Aligning with Chengyang is an important first step in developing the Siviour resource. Renascor plans to ensure that strong relationships are formed and maintained as we fast-track Siviour to full production,” said Managing Director David Christensen.
The MOU is for up to 10,000 tonnes of graphite from concentrate per year from stage 1 of Siviour, and up to 30,000 tonnes from stage 2. Renascor estimates that total graphite production will be 22,800 tonnes per year during stage 1 and up to 156,000 tonnes per year in stage 2.
Last year, a prefeasibility study for Siviour estimated that the project could produce approximately 117,000 tonnes of graphite over a 30-year mine life.
According to the study, the staged development option would require an initial capital investment of U$29 million, with stage 2 development forecast to cost a further U$91 million.
The MOU also includes a potential partnership between Chenyang and Renascor to establish a pilot plant at Chenyang’s facilities, as well as collaboration for the supply of advanced products from Siviour.
Looking ahead, further discussions are scheduled between the companies, as the MOU is non-binding. Negotiations about price, product quality and other offtake parameters are still ongoing.
On Thursday, shares of Renascor jumped 24 percent to close in Sydney at AU$0.036. The company’s share price has increased 5.88 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.