Graphex Mining (ASX:GPX) has issued a number of recent announcements relating to development of its Chilalo graphite project in Tanzania. Highlights of those announcements include the following.
- Statement of Sales Intent signed with multiple parties for 80,000 tonnes of Chilalo graphite.
- Binding offtake agreements for the sale of graphite expected in the near future.
- Capital raising of $2.45 million at $0.28/share.
- Negotiations with prospective partner CN Docking Joint Investment and Development Co. Ltd (‘CN Docking’) continue; there has also been strong interest from other credible parties with respect to development financing.
Most importantly, Graphex appears to be shoring up project development financing, with new funding options emerging. This is hardly surprising, given not only the quality of the Chilalo project but also the recent uplift in demand for graphite, as highlighted by the number of other developers announcing funding and offtake agreements recently.
We believe that CN Docking remains in the box seat to become Graphex’s JV partner; however, the alternative funding options being assessed by Graphex may well encourage that company to finalise its agreement in the near term or risk losing the project, as well as (potentially) the all-important offtake. Either way, Graphex looks set to finalise its financing soon.
The information in this email should not be the only trigger for your investment decision. We strongly recommend you seek professional financial advice whenever making financial investment decisions.
Valuation: we maintain our valuation of Graphex at $1.90/share (share price $0.31).
Our valuation assumes a discount rate of 16% to allow for risks associated with the project’s location and financing. We will review that assumption once financing is complete.