Tirupati Graphite plc (LON:TGR) has announced that its subsidiary Tirupati Madagascar Ventures SARL (TMV) has entered into agreement to acquire three additional mining permits in Madagascar, covering a total area of 31.25km2 and located in the vicinity of the Company’s existing projects in the country. The consideration agreed for the acquisition is a total of MGA 800 million (c.£167,000) to be paid in cash upon milestones in the process of completing the transfer of the permits to the Company. The transfer requires approval by the ministry of Mineral Resources and application thereof is in the process of being made to the Bureau du Cadastre Minier de Madagascar (BCMM).
Due to the proximity to its existing operations, the Company believes it can progress activities in the acquired projects in a timely and cost-effective manner alongside its other Madagascan projects. While no JORC 2012 compliant mineral resource statement is available for the permits, historical geological data and initial ground assessments made by the Company suggest that the new permits could have the potential to add two or three 18,000 tonnes per annum (tpa) modular facilities for flake graphite production. This could therefore significantly add to the Company’s currently planned 84,000 tpa capacity across the Vatomina and Sahamamy projects.
Under the agreement, TMV retains the right to conduct studies in the areas during the process of transfer of the permits. The process of transfer is same as was executed by TMV successfully for the acquisition of the Vatomina project and the Company’s in country team is well versed for progressing the transfer process. There is however no guarantee on if and when the transfer shall complete.
The acquisition of these permits aligns with the Company’s strategy to continue to acquire resources so as to facilitate growth of its primary flake graphite operations to c.8% of global demand by 2030, estimated to be in the range of 400,000tpa. The Company considers acquiring additional resources in the vicinity of its current projects in Madagascar as a vital base to facilitate its strategy while it continues to progress its efforts for completing the acquisition of other projects in a second location.
Shishir Poddar, Executive Chairman of Tirupati Graphite, said:
“We are pleased to have agreed to acquire additional permits near our existing projects in Madagascar. It is our priority to increase ground in Madagascar alongside other locations to preserve our long-term capacity targets and resource security, and these acquisitions can help us enhance our overall output from Madagascar by up to an additional 48,000 tpa in due course.
“It is our stated strategy to develop capacity of circa 8% of the global flake graphite market or 400,000 tpa by 2030. Our intention is for c.50% of that capacity to be in Madagascar to take advantage of the favourable flake size distribution its deposits possess. Acquisitions like this will be instrumental in enabling us to achieve our aspiration to become one of the most significant players in graphite as global demand increases for this critical energy transition mineral.”