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Comet Resources (ASX:CRL) - Managing Director, Matthew O'Kane
Managing Director, Matthew O'Kane
Source: The Market Herald
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  • Comet Resources (CRL) and International Graphite have agreed to form a vertically integrated graphite business in WA
  • Comet will gain a 25 per cent stake in the company by offering up its Springdale graphite project to act as a feedstock source for International Graphite’s facility
  • This partnership unlocks the value of Springdale as a mine and helps to build WA’s reputation as a reliable graphite supplier to the global battery market
  • International Graphite also hopes to be admitted onto the ASX and plans to complete an IPO in the first quarter of next year
  • Shares in Comet Resources were down 7.41 per cent to 2.5 cents at 12:50 pm AEDT

Comet Resources (CRL) has entered a deal with International Graphite to form a vertically integrated high-technology graphite business in Western Australia.

This aligns with the company’s goal of producing micronised, battery anode material and other products for lithium-ion batteries.

Comet will gain its stake in the proposed venture by offering up its Springdale graphite project to International Graphite.

According to the announcement, Springdale is “uniquely suited” as a feedstock source for International Graphite’s facility in Collie, WA. This is because of its location and the amenability of its graphite to be processed into high-value products such as battery anode materials.

The high-grade project is reportedly one of the highest-grade graphite ores internationally. Previous testwork has shown the concentrate can be purified to grades above 99.95 per cent, which is needed to produce battery anode materials.

“International Graphite’s acquisition of the Springdale resource will cement our vision as WA’s first fully integrated graphite producer,” Phil Hearse, Chairman of International Graphite, said.

“Control of this high quality resource will close the supply loop ensuring we have consistent feed for our new downstream processing facility, at Collie, and ‘chain of custody’ oversight of our product, from mine to customer.”

Further, International Graphite plans to complete an initial public offering (IPO) to be admitted onto the ASX.

In exchange for the sale of the project, Comet will receive 40 million International Graphite shares upon the completion of its IPO, which initially values the project at $8 million based on the proposed issue price of $0.20 per share. Comet is expected to own about 25 per cent of the company.

International Graphite’s acquisition of Springdale is subject to approval by Comet’s shareholders, as well as conditional approval from the ASX and the subsequent admission of International Graphite onto the ASX.

If all goes to plan, the IPO, which will seek to raise between $6 million and $8 million, will be completed by the end of the first quarter of 2022.

Shares in Comet Resources were down 7.41 per cent to 2.5 cents at 12:50 pm AEDT.

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