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Triton Minerals sells 70% stake in Mozambique graphite projects to Shandong Yulong for $17m

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By Imelda Cotton - 
Triton Minerals ASX TON Mozambique divestment Shandong Yulong
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Triton Minerals (ASX: TON) has agreed to divest 70% of its graphite assets in Mozambique to a subsidiary of China’s Shandong Yulong Gold for a cash consideration of $17 million.

The transaction will include all of Triton’s interests in the flagship Ancuabe project, as well as the Nicanda Hill, Nicanda West and Cobra Plains leases.

Funds from the divestment will allow Triton to pursue value-accretive acquisitions with a view to diversifying its portfolio.

‘Most logical route’

Triton will initially retain a 30% joint venture (JV) interest in the assets, giving it the opportunity to co-develop and operate the projects and maintain continued exposure to the graphite market.

Executive director Andrew Frazer said the divestment would be the “fastest and most logical” route to production for Ancuabe.

“We believe this transaction is the best way to generate value for our shareholders in a timely manner, given Shandong Yulong’s size, balance sheet and desire to develop and operate these graphite assets,” he said.

“We look forward to working with Shandong in executing the transaction and going forward as a JV partner.”

Staged payments

Under the terms of the divestment, Shandong Yulong – which, together with its associates, holds nearly 36% voting power in Triton – will pay Triton a $17m cash consideration in three instalments.

The first instalment of $2.55m will be made within 15 days of the agreement and a further $5.95m once pre-set conditions have been met, including the establishment of the Mozambique JV.

The final $8.5m instalment will be paid in February 2025.

Ancuabe DFS

A 2017 definitive feasibility study (DFS) for the Ancuabe project confirmed it to be a high-quality, long-life, high-margin graphite asset for Triton.

A maiden ore reserve of 24.9 million tonnes grading 6.2% total graphitic carbon (TGC) supported the study evaluation period of 27 years at a production capacity of 60,000tpa of graphite concentrate.

The total indicated and inferred mineral resource at Ancuabe’s T12 and T16 deposits has been estimated at 46.1Mt grading an average 6.6% TGC for 3.04Mt contained graphite.