TSX-V: GRAT
TORONTO, Oct. 17, 2019 /CNW/ - Gratomic Inc.
("Gratomic" or the "Company") (TSX-V:
GRAT) (CB81–FRANKFURT)
a vertically integrated graphite to graphenes, advanced materials
development company announces that it has signed an agreement with
Todaq Star Program Phase 1 Corp. ("Todaq"), a subsidiary of
TODAQ Holdings Inc. ("TODAQ Holdings"), to supply Todaq with
an aggregate of US$25,000,000 of
graphite from its Aukam project in Namibia over approximately 39 months (the
"Supply Agreement"). The initial order will be for 600
tonnes of graphite valued at US$3,000,000 payable in TODA Notes
("TDN"), a digital asset created as a medium for exchange
and store of value, at a price of US$0.10 per TDN for an aggregate of 30 million
TDN. The initial 600 tonnes of graphite are to be delivered within
90 days. Thereafter, Todaq will order an additional 600 tonnes of
graphite on the same terms 30 days and 60 days after the initial
order for an aggregate initial purchase of 1800 tonnes of graphite
for US$9,000,000 in consideration for
the issuance of an aggregate of 90 million TDN. Thereafter, Todaq
will place monthly orders with a value of US$484,848.49 based upon the applicable purchase
price for graphite at the time and the applicable exchange rate
between US$ and TDN. No mineral resources, let alone mineral
reserves demonstrating economic viability and technical
feasibility, have been delineated on the Aukam Property. The
Company is not in a position to demonstrate or disclose any capital
and/or operating costs that may be associated with satisfying the
terms of the Todaq Supply Agreement.
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."
FORWARD LOOKING STATEMENTS: This news release contains
forward-looking statements, which relate to future events or future
performance and reflect management's current expectations and
assumptions. Such forward-looking statements reflect management's
current beliefs and are based on assumptions made by and
information currently available to the Company. Investors are
cautioned that these forward-looking statements are neither
promises nor guarantees and are subject to risks and uncertainties
that may cause future results to differ materially from those
expected. These forward-looking statements are made as of the date
hereof and, except as required under applicable securities
legislation, the Company does not assume any obligation to update
or revise them to reflect new events or circumstances. All of the
forward-looking statements made in this press release are qualified
by these cautionary statements and by those made in our filings
with SEDAR in Canada (available
at www.sedar.com).
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SOURCE Gratomic
