A Singapore-based company, Tristream Capital, intends to invest N$70,5 million (3 million British pounds) in acquiring a 5% Gross Sales Royalty of graphite sales from the Aukam Property in Namibia.
Gratomic Inc., which owns the Aukam property, signed a non-binding letter of intent with Tristream Capital on June 14, 2024.
The Aukam project is in southern Namibia, close to the port city of Luderitz in the Karas Region.
The property, covering 137,473 hectares under EPLs 3895, EPL 6710, EPL 7512, and EPL 7513, is on farm Aukam 104 and Harichab 121.
Since the commissioning of the project, Gratomic has processed 80 tonnes of material through the processing plant at a grade of 94% Cg concentrate, which is being stored on-site in the storage silos.
The Aukam mine is expected to start operations this year to produce between 7,600t and 12,000t.
By 2025, production should be between 12,000 and 16,000t before ramping up to 16,000 and 22,500t.
Tristream Capital’s payment of the investment amount is conditional upon satisfactory completion of due diligence by Tristream Capital and the parties entering into a definitive agreement within 90 days of executing the letter of intent.
The definitive agreement will include terms and conditions, representations, warranties, covenants and agreements customary for such a transaction.
The definitive agreement will also include certain milestones to be negotiated and specified in the definitive agreement.
Upon receipt of the investment amount, Gratomic will pay Tristream Capital interest on the investment amount of 10% per year for the first six months.
Tristream Capital will also receive a 5% gross sales royalty for five and a half years, six months after paying the investment amount.
After that, Tristream Capital will be paid the 1% gross sales royalty for the life of the mine.
The royalty will have a first-ranking security interest over plant and machinery at the Aukam Property.
Tristream Capital will be primarily responsible for preparing the definitive agreement.
Gratomic will pay all Tristream Capital’s reasonable and adequately incurred expenses due diligence exercise to a maximum of 30,000 British pounds, provided it preapproves any individual expense over 2000 British pounds.
