Shandong Tianye increases stake in ASX-listed graphite hopeful

Shandong Tianye increases stake in ASX-listed graphite hopeful

Fri, 31/08/2018 - 10:59
Triton drilling

Drilling operations at Triton Minerals' Ancuabe graphite tenements in Mozabique. Photo: Triton Minerals

Chinese real estate and resources conglomerate Shandong Tianye Mining Co will work with Triton Minerals to secure a funding package for the development of the Ancuabe graphite mine in Mozambique, after increasing its stake in the ASX-listed explorer to just under 20 per cent.

Shandong Tianye, which is the parent company of Australian gold miner Minjar Gold, has agreed to invest $1.2 million in Triton via a private placement, priced at 4.7 cents per share.

The investment will increase Shandong Tianye’s stake in Triton to 19.4 per cent.

Triton will also launch a $2.8 million entitlements issue to provide working capital to finalise a project funding package by the end of the year, continue early works and to start detailed design activities with engineering contractor Metallurgical Corporation of China.

MCC signed a letter of intent with Triton to construct the processing plant and other infrastructure at the Ancuabe mine in July, with a formal contract expected to be reached in the third quarter of this year.

Triton’s definitive feasibility study for the mine indicated the plant and associated infrastructure would cost around $US99 million to build, however, said the tendering process unearthed cost savings of between 20 per cent and 25 per cent.

Managing director Peter Canterbury said the financing support was a critical step to enable Triton to secure project debt funding through MCC and its financing partners.

“The support shown by Shandong Tianye provides further evidence of the growing demand for expandable graphite in China,” Mr Canterbury said.

“The Ancuabe graphite project is ideally suited to supply large flake, high concentrate expandable graphite.

“With three world class graphite projects in close proximity to existing infrastructure and mines, Triton has placed itself in an incredibly strong position and looks forward to entering flame retardant and battery markets, which are forecasted to be some of the fastest growing sectors over the next decade.”

Triton’s Ancuabe project has attracted significant Chinese support outside of Shandong Tianye and MCC, with offtake partners Qingdao Chenyang Graphite and Qingdao Tianshengda Graphite Company accounting for up to 50 per cent of the first stage of production.

Both companies will take up to 16,000 tonnes per year of graphite concentrate from the mine for the next five years.

Triton is aiming to start producing graphite concentrate at Ancuabe towards the end of next year.