While Australia is not currently a graphite producer, there are several developing projects on the local scene. And emerging junior Chase Mining Corporation is keen to get in on the action.
Chase Mining has announced its intention to purchase private company Green Critical Minerals, which would grant it the right to acquire up to 80 per cent of the graphite rights to McIntosh – considered one of the most advanced graphite projects in Australia.
The purchase price comprises 460 million fully paid ordinary shares, 100 million options (involving an exercise price of $0.015 per share) and 459 million performance rights that would convert to ordinary shares in three equal tranches following the satisfaction of various performance milestones.
Among other regulatory approvals, the acquisition is subject to Chase Mining completing a capital raise so is has a minimum of $4.5 million in cash. The company said it had received firm commitments in a $3 million placement to sophisticated and professional investors costing $0.015 per share.
According to Chase Mining, 81 per cent of the 23.8-million-tonne mineral resource is classified in the higher confidence indicated category, with more than 40,000m of graphite-targeted drilling to have taken place at the project so far.
As part of the acquisition, Chase Mining would take control of an earn-in agreement Green Critical Minerals had established with Hexagon Energy Materials.
Once the transaction has been completed, Chase Mining would be required to spend $300,000 upon commencing the earn-in and a further $200,000 within 12 months. The company would then need to spend $3 million on exploration expenditure over three years to earn 80 per cent of McIntosh’s graphite rights.
Hexagon would be free carried until a decision to mine, which would need to take place within two years of Chase earning the 80 per cent interest.
Chase Mining independent directors Leon Pretorius and Julian Atkinson said the acquisition of Green Critical Minerals sets the company up for success.
“This is a transformational acquisition for the company, being able to secure the graphite rights (80 per cent) to the McIntosh graphite project known as one of the most advanced and largest graphite resources in Australia,” they said in a joint statement.
“The McIntosh project has more than 40,000m of graphite-focused drilling conducted on the property and extensive metallurgical test work.
“(This provides) a unique opportunity to advance a critical mineral project to development at a pivotal time where sovereign supply of graphite located in a Tier-1 mining jurisdiction is limited.”
Shares in Chase Mining had jumped 35 per cent on the day of announcement (June 15). The company had a market capitalisation of $11.8 million.