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- Despite COVID-19 disruptions, EcoGraf (EGR) has made significant progress at its graphite facilities during the June quarter
- The Kwinana-based facility’s purpose is to produce spherical graphite products to export into global markets
- To do this, EcoGraf is utilising its purification technology to support the growing demand for sustainable energy and recycling
- In early June, EcoGraf secured a 10-year sales agreement with a German technology group for 50 per cent of planned production from the Kwinana facility
- EcoGraf continued discussions with the Tanzanian Government for US$60 million (roughly A$83.2 million) of funding to construct the Epanko Graphite Mine
- The company successfully raised $3.79 million to complete funding and programs for its business
- And, positively, ended the quarter with $2.78 million in cash
- Company shares are down a slight 0.76 per cent and trading for 6.6 cents just after midday trade
EcoGraf (EGR) has announced that despite disruptions caused by COVID-19, it made significant progress in its key initiatives during the June quarter.
EcoGraf has been gearing up to produce high-purity graphite for the lithium-ion battery and advanced manufacturing industries. Over US$25 million (roughly A$34.6 million) has been invested to create two development-ready graphite businesses.
Kwinana facility
The first processing facility is located in Kwinana, Western Australia. Its purpose is to manufacture spherical graphite products to export into Asia, Europe and North America. It is doing this by using an environmentally sustainable purification technology to not only cater for high-performance battery anode graphite but also ensuring it sustainably produced.
In May 2020, the World Bank Group issued a report which highlighted the need for efficient battery mineral extraction and use.
Effective recycling is critical to minimise climate change and over three billion tonnes of battery minerals will be needed by 2050 to transition to renewable energy.
This project will supply additional feedstock for the spherical graphite processing facilities and provide customers with a long term supply of high-quality graphite products for industrial applications.
In early June, EcoGraf signed a non-binding agreement with thyssenkrupp Materials Trading GmbH which is a subsidiary of German technology group, thyssenkrupp AG.
The agreement is for the sale of 50 per cent of the planned production of purified spherical graphite battery anode material and by-product for an initial 10-year term.
The company continues to receive interest from prospective customers wanting to secure sustainable supply of battery materials.
EcoGraf also finalised commercial terms with the WA Government for the lease of the Kwinana facility site. As the proposed 20,000 tonnes per annum plant requires two hectares, the 6.7 hectare site has been divided into two leases to provide enough area for future plant expansion.
Positively, EcoGraf received confirmation the high-purity graphite produced by its namesake technology, had been qualified by two leading European industrial customers.
Late in the quarter, EcoGraf received battery electrochemical results for its preferred feedstocks. The results increased product intelligence and confirmed the feed source performs differently with some performing better than other.
Epanko Graphite Project
To compliment the Kwinana facility, the company is developing the TanzGraphite natural flake graphite business, beginning with the Epanko Graphite Project.
The graphite company continued progressing senior debt financing with KfW IPEX-Bank and a second institution.
EcoGraf met with relevant Government Ministries in Tanzania to discuss the US$60 million (roughly A$83.2 million) financial proposal for Epanko’s construction.
The funding will provide Tanzania with an opportunity to develop a world-class graphite mine in the Ulanga District of the Morogoro region.
EcoGraf and KfW IPEX-Bank are ready to proceed to prepare formal loan documentation to enable the financing arrangements to go ahead.
The Epanko Project reportedly has strong economics with a pre-tax net present value (NPV) of US$211 million (roughly A$292.6 million).
It is expected to operate for over 40 years. Over this time, it’s expected to contribute over US$2 billion (roughly A$2.7 billion) to Tanzania. Importantly, over 95 per cent of the 300 permanent staff will be Tanzanian and an estimated 4500 indirect jobs will be stimulated by the operation.
Corporate
EcoGraf used up $968,000 on operational activities and around $24,000 on exploration and evaluation investment activities.
Due to the $2.19 million share purchase plan and $1.6 million placement, the company had $3.67 million after transaction costs.
EcoGraf ended the quarter with $2.78 million which represents a massive increase from the 99,000 at the end of the March quarter.
Company shares are down a slight 0.76 per cent and trading for 6.6 cents each just after midday trade.
