Northern Graphite has signed an option agreement to purchase a 100% stake in the Mousseau West Graphite project in Canada from an undisclosed firm.
In accordance with the deal, Northern will pay $50,000 for the six-month exclusive right to undertake due diligence on the property.
In case of electing to exercise its option, the firm has to pay $500,000 in cash and issue 900,000 of its common shares to acquire the Mousseau West project.
Northern Graphite will also have the right to acquire a 2% net smelter royalty (NSR) from the owners. This can be done at any time upon the payment of $1m.
The Mousseau West property is located 80km from the producing Lac-des-Iles (LDI) graphite mine in Quebec.
In December 2021, Northern agreed to purchase the LDI mine in Canada and a graphite deposit/ processing plant in Namibia from Imerys’ subsidiaries.
Northern Graphite CEO Gregory Bowes said: “The Company’s main priority when the Imerys transaction closes is to extend the mine life at LDI, increase production back to its nameplate capacity of 25,000tpa and solidify its position as the only producing graphite mine in North America.
“The Mousseau West deposit not only provides an attractive option for meeting these objectives, but it also has the potential to become a significant project in its own right.
“The world requires significantly more graphite production to support the evolution to electric vehicles and Northern believes that high-quality deposits located close to infrastructure in politically stable jurisdictions will become very valuable commodities.”
Located around 150km north of Montreal in the Mont-Laurier area, the Mousseau West property comprises 12 claims covering a total area of 489ha.
More than 7,500m of drilling has been conducted on the property.