21st Oct 2014 09:23
LONDON (Alliance News) - StratMin Global Resources PLC Tuesday said it has entered into an offtake agreement to sell its natural flake graphite products to one of the world's largest independent processors and merchants of graphite.
The five year agreement was signed on October 16, but StratMin has not revealed the identity of the buyer. The terms of the agreement will see the buyer purchase all the material that StratMin can produce within a pre-determined product specification, it said in a statement.
The buyer also has first option to, but is not obliged to, buy all other materials produced by StratMin.
StratMin shares were up 27.8% to 5.75 pence per share Tuesday morning.
StratMin and the buyer will agree the price six months in advance on a rolling basis to allow both parties to reset prices to reflect any changes in the market. Both parties have four months from resetting their prices to agree the pricing for the succeeding six months and either StratMin or the buyer may terminate the agreement within six months of prices being reset, it said in a statement.
The agreement has been signed and has set out the first 12 month's volumes and grades, which will be subject to an annual review thereafter, it added.
The buyer will also provide StratMin with technical assistance by sharing graphite marketing information and processing knowledge, it said. "Over time, the board expects this partnership to improve StratMin's ability to produce and market a world class graphite product which should command a premium price," said StratMin.
"Securing this initial five year offtake agreement demonstrates confidence in the quality and potential of StratMin's product and operations from an established graphite processing and trading company," said Managing Director Manoli Yannaghas.
"We have optimized the production process in order to be able to achieve superior pricing for a higher quality product. We believe that securing unfettered access to the graphite market through the Agreement vindicates our strategy to date," he added.
By Joshua Warner; [email protected]; @JoshAlliance
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