Speaking to Investing News Network, International Graphite (ASX:IG6,OTCPL:IGRPF) Managing director Andrew Worland said almost all the graphite consumed in Europe is currently sourced from China.
“That’s where the opportunity is,” he said, noting strong interest from European customers looking to diversify supply and international graphite growth of 3 to 5 percent per year.
International Graphite is targeting this gap through a Joint venture with AlchemiaWhich wants to build a significant graphite-processing facility in Italy.
Under the joint venture, Alkimia will hold 51 percent stake, while International Graphite will hold the remaining 49 percent. The companies will retain 50/50 profits.
International Graphite is currently leading the technical and commercial workflow including site selection, infrastructure planning and capital cost estimation. It is also developing an economic model for the project.
Worland said the project would focus on processing graphite concentrate obtained from existing producers rather than developing new mining operations.
Near-term milestones include securing commercial agreements by May and reaching a final investment decision by June. International Graphite is also engaging with potential customers to establish offtake agreements to support growth.
“We think we’ve found incredible value. We have a different approach than most of our graphite peers who are primarily focused on mining,” Worland said. “Our focus at this point is on near-term cash flow, low-capitalization projects and efficient use of shareholder funds with an enterprise value of US$10 million to US$12 million.”
The managing director said more updates on these catalysts are expected in the next six to 12 weeks.
Watch the full interview with Andrew Worland, Managing Director of International Graphite, above.
