Armadale has signed a memorandum of understanding (MoU) to sell graphite products from its Mahenge Liandu project in Tanzania to Chinese company the Matrass Group.

Under the proposed offtake agreement, Armadale will initially sell 30,000tpa of graphite concentrate produced at Mahenge Liandu for a period of five years.

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The offtake will represent more than 60% of the project’s 49,000tpa average target production.

Armadale plans to start a test-work programme before the end of the first quarter of this year to progress the MoU to a binding agreement.

The company is currently holding discussions with a number of potential customers with regard to the remaining 19,000tpa of graphite production.

Armadale director Nick Johansen said: “In order to expedite our development objectives at Mahenge Liandu, we have been simultaneously pushing our commercial activities and operational work streams over the past six months with the intention of securing offtake agreements and finalising the various permitting items.

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“We have been simultaneously pushing our commercial activities and operational work streams over the past six months with the intention of securing offtake agreements.”

“Demand for high-quality graphite products, such as ours, have been highlighted through other offtake agreements, including ASX listed Black Rock Mining and the binding offtake for 205,000tpa from its project, which is proximal to Mahenge Liandu.”

Meanwhile, Armadale has completed feasibility study drilling and expects to restart site activities soon at Mahenge Liandu. Site activities for the study had slowed down over the Tanzanian wet season.

Additionally, the company completed the environmental and social impact study for the project.

A final report is expected to be submitted to the National Environmental Management Committee for validation and initiation of environmental permit approval.