DNI Metals Inc. Signs Cooperative MOU to Supply Large Flake Graphite to Korean End Users
Toronto, Ontario--(Newsfile Corp. - August 15, 2017) - DNI Metals Inc. (CSE: DNI) ("DNI") has signed a non-binding Memorandum of Understanding agreement ("MOU"), with ASX listed Peninsula Mines Limited ("PSM" or "Peninsula") to form a cooperative joint venture to supply and potentially produce, initially up to 20,000 tonnes per year of large flake graphite concentrate to Korean end-users from 2018.
The MOU includes the following non-binding terms:
The parties agree to cooperate with respect to supply and potential development and production of initially up to 20,000 tonnes per annum ("TPA") of >180 micron, >95% Total Graphitic Carbon ("TGC") flake graphite concentrate from calendar 2018.
The parties agree to identify scope to significantly increase supply to meet projected demand for large-flake graphite concentrate to supply expandable graphite and/or other graphite products production in South Korea.
Under this agreement the two Company's together aim to initially supply large-flake graphite from Madagascar, or elsewhere, to meet the required specifications for production of expandable graphite, as defined in the offtake agreements to be entered into by the parties, including the criteria as stipulated in the offtake Memorandum of Understanding ("offtake MOU") signed by Peninsula with Korean expandable graphite producer, Graphene Korea Co., Ltd. ("Graphene Korea").
The MOU is intended to form the basis of a binding flake graphite concentrate supply/offtake joint venture agreement ("Binding Supply Agreement") that the parties will use their best endeavors to complete within 6 months of signing this MOU.
Dan Weir, CEO of DNI, commented, "DNI and PSM have strategically identified Korea as an area of growing demand for large flake graphite. We look forward to working with Peninsula's experienced and established team, and with their Korean partners, to access the large and growing Korean flake-graphite markets."
About Peninsula Mines Limited
Peninsula Mines Ltd ("Peninsula") is an Australian listed, exploration/development company focused on developing opportunities for mineral discovery and production in South Korea. Peninsula is well established in South Korea, having worked in the Country for over five years.
Peninsula has tenements and tenement applications in South Korea with identified fine to large flake graphite mineralisation and Peninsula intends to progress these and other projects to JORC compliant resource definition and economic (feasibility) studies and development of mining and flake graphite concentrate production (for spherical graphite — Li-ion battery applications and/or expandable graphite and other markets in Korea and/or elsewhere in east Asia).
PSM signed a Memorandum of Understanding ("MOU") with Korean expandable graphite producer, Graphene Korea, in June 2017D1, which is non-binding (except for certain non-material terms) and envisages long-term strategic cooperation with respect to offtake of graphite concentrate and development of graphite mining and processing projects both within and potentially outside Korea. The offtake and development MOU includes a commitment to cooperate in respect of:
Supply by the Company, to Graphene Korea, initially up to 20,000 TPA of >180 micron, >95% Total Graphitic Carbon ("TGC") flake graphite concentrate, and,
Development of mining and processing facilities in South Korea, and potentially overseas, for selected projects that meet required metallurgical specifications.
Peninsula Mines and Graphene Korea are working together to identify supply from projects that have the potential to produce flake-graphite concentrate that will meet the specifications for production of Graphene Korea's expandable graphite product, which are, specifically >180 micron flake graphite and a >95% concentrate grade of material that shows expandable properties.
About DNI Metals
Certain advisors and directors of DNI have significant operational experience at historical hard rock graphite mines in Canada (e.g. Ontario and Quebec) and Australia. Between them, they have built three (3) processing plants and designed two (2) others; all, which were shut down in the 1990,'s due to increased Chinese competition. Keith Minty, a director, previously worked at Cal Graphite near Kearny, Ontario.
It was our team's understanding of the high production and capital expenditure costs associated with so-called "hard rock" graphite mining that inspired DNI to search for saprolite-hosted graphite deposits.
Certain parts Madagascar and Brazil, produce graphite from weathered material called saprolite.
According to Dictionary.com, saprolite is described as:
"Soft, thoroughly decomposed and porous rock, often rich in clay, formed by the in place chemical weathering of igneous, metamorphic, or sedimentary rocks. Saprolite is especially common in humid and tropical climates. It is usually reddish brown or grayish white and contains those structures (such as cross-stratification) that were present in the original rock from which it formed."
DNI owns one (1) commercially permitted, saprolite-hosted graphite deposit in Madagascar; located 50kms from the country's main seaport, and has signed an LOI to purchase a second graphite project. The deposits are located less than two (2) kms from the paved national highway. DNI intends to develop the projects, should the economic viability and technical feasibility be established. DNI has not yet established mineral resources or mineral reserves supported by a PEA or mining study (PFS or FS).
DNI has a graphite wholesale business, in which it buys and sells high quality graphite. This business has shown a steady increase in volume over the past year.
Steven Goertz (MAusIMM, MAIG), who is a qualified person, approved the technical disclosure in this news release.
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We seek Safe Harbour. This announcement may include forward looking statements. While these statements represent DNI's best current judgment, they are subject to risks and uncertainties that could cause actual results to vary, including risk factors listed in DNI's Annual Information Form and its MD&A's, all of which are available from SEDAR and on its website.