- Graphite is being purchased by Todaq to sit in reserve as a backstop to underpin the value of deployed TDN
- The TDN will allow for cryptographic ownership and tracking of commodities as they are processed and traded.
- The price of TDN was negotiated between the parties in respect of the first 1800 tonnes of graphite. Thereafter, the price of TDN will be based on the market price for TDN for the month in which subsequent orders are placed by Todaq
The graphite is being purchased by Todaq to sit in reserve as a backstop to underpin the value of deployed TDN. The TDN will allow for cryptographic ownership and tracking of commodities as they are processed and traded. The price of TDN was negotiated between the parties in respect of the first 1800 tonnes of graphite. Thereafter, the price of TDN will be based on the market price for TDN for the month in which subsequent orders are placed by Todaq. The price per tonne for graphite was negotiated between the parties and is fixed for the first 1800 tonnes. Thereafter, the price per tonne will be based on the price at which the Company sells similar product to third parties. Although Sheldon Inwentash, Co-CEO of the Company, acts as an advisor to TODAQ Holdings, the Supply Agreement was negotiated on an arm’s-length basis between Gratomic and Todaq without any involvement by Mr. Inwentash, and Gratomic is at arm’s length to Todaq and TODAQ Holdings.
The initial 1800 tonnes of graphite will be processed through the
Company’s pilot processing plant. The Supply Agreement provides that the
graphite to be delivered will comprise 95% carbon, contain no more than
0.5% moisture content and will be sized at 173 µm (0.173 mm) or less.
Gratomic is in the process of finalizing and fine-tuning its commercial
scale graphite processing plant referred to in the Company’s Press
Release dated May 3, 2019.
Gratomic Executive Chairman and Co-CEO, Sheldon Inwentash
commented, “Building our long-term treasury and creating secure digital
ownership of commodities that can carry an immutable history of its
quality, amount, handling, testing and custody, and which can move
without friction through manufacturing chains or on trading platforms is
where we need to be. As we move to production, this acquisition program
creates the foundation to start that focused work”
Gratomic wishes to emphasize that Supply Agreement is conditional on
Gratomic being able to bring the Aukam project into a production phase,
and for any graphite being produced to meet certain technical and
mineralization requirements.
Gratomic continues to move its business towards production and as part of its business plan, expects to obtain a National Instrument 43-101 Standards of Disclosure for Mineral Projects technical report to help it ascertain the economics of Aukam.
Presently the Company uses its existing pilot processing facility to
produce certain amounts of graphite concentrate from accumulated surface
graphite.
Risk Factors
The Company advises that it has not based its production decision on
even the existence of mineral resources let alone on a feasibility study
of mineral reserves, demonstrating economic and technical viability,
and, as a result, there may be an increased uncertainty of achieving any
particular level of recovery of minerals or the cost of such recovery,
including increased risks associated with developing a commercially
mineable deposit.
The Supply Agreement provides that if Gratomic is unable to deliver
graphite in accordance with the orders from Todaq, Todaq has the right
to refuse to take any subsequent attempt to fulfil the order, terminate
the agreement immediately, obtain substitute product from another
supplier and recover from the Company any costs and expenses incurred in
obtaining such substitute product or suing for damages under the
contract.
Historically, such projects have a much higher risk of economic and
technical failure. There is no guarantee that production will begin as
anticipated or at all or that anticipated production costs will be
achieved.
Failure to commence production would have a material adverse impact
on the Company’s ability to generate revenue and cash flow to fund
operations. Failure to achieve the anticipated production costs would
have a material adverse impact on the Company’s cash flow and future
profitability.
Steve Gray, P.Geo. has reviewed,
prepared and approved the scientific and technical information in this
press release and is Gratomic Inc’s “Qualified Person” as defined by
National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
About Gratomic Inc.
Gratomic is an advanced materials company focused on mine to market
commercialization of graphite products most notably high value graphene
based components for a range of mass market products. We are
collaborating with a leading European manufacturer of graphenes to use
Aukam graphite to manufacture graphene products for commercialization on
an industrial scale. The company is listed on the TSX Venture Exchange
under the symbol GRAT.
“Neither TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.”
