LONDON (ShareCast) - (Sharecast News) - Africa-focussed natural resources investment company Armadale Capital has signed a memorandum of understanding for a proposed offtake agreement with CoolRU Information Technology, it announced on Thursday.

The AIM-traded firm described CoolRU as a China-based technology company, with the agreement for high-quality graphite products produced at Armadale's Mahenge Liandu Graphite Project in Tanzania.

It said the agreement covered the proposed offtake of 5,000 tonnes per annum of graphite concentrate produced at Mahenge Liandu, and was for an initial term of five years at a price to be agreed based on the Chinese benchmark for the quality of the graphite produced.

The board said the memorandum, in addition to the agreement announced on 19 February with the Matrass Group, brought the total offtake under memorandums of understanding to 35,000 tonnes per annum, representing 71.4% of the 49,000 tonnes per annum average annual production target.

Discussions were said to be advancing with an unnamed "major organisation" in a bid to secure a further offtake agreement, in respect of the remaining target production, and work was said to be continuing at the same time to finalise a definitive feasibility study and to convert the memorandums of understanding into binding offtake agreements.

"Securing this MoU is another important step in the commercialisation of Mahenge Liandu," Armadale director Nick Johansen.

"We now stand with over 70% of planned annual graphite production under offtake MoU and expect to secure further offtake agreements, which will cover all planned production."

Johansen said the news came at a time when the company was accelerating its transition from explorer to emerging graphite producer, while multiple important work streams related to completion of the project's definitive feasibility study were underway.

"Armadale will, as recently demonstrated, provide updates to market as each important workstream is concluded."

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