Quantum Graphite secures 20-year offtake deal

Quantum Graphite (ASX:QGL) has secured a binding ore supply agreement with Sunlands Pure Group, consolidating all downstream processing and refining activities.

Under the 20-year agreement, which includes an option for an additional 20-year extension, SPG will act as the exclusive offtaker for all mineral production from QGL’s Uley Mines, including the highly anticipated Uley 2 Project on South Australia’s Southern Eyre Peninsula.

To maintain exclusivity, QGL must meet strict production targets, initially delivering enough mineral volume to generate 100 kilotonnes per annum of refined product.

Within seven years of first production, this target is set to scale significantly to support an annual refined capacity of 500ktpa.

Additionally, QGL is required to maintain a minimum rolling JORC 2012 ore reserve equivalent to three years of mineral production.

The offtake pricing will operate under a cost-plus model. This framework guarantees QGL a minimum margin equivalent to approximately $375 per tonne of SPG concentrate production, calculated at an applicable USD exchange rate of 0.64.

The agreement outlines a multi-stage downstream structure: concentrate will first be processed near the Uley 2 mine site, followed by advanced purification at a new refinery to be constructed in Al Buraimi, northern Oman.

The processing pipeline will deliver 99.9% pure graphitic carbon to critical global markets, including the lithium-ion battery anode and thermal energy storage industries.

The companies are now moving to finalise a site management agreement to govern ongoing operations and supply logistics.