Tristream Capital, a company that offers alternative financing solutions to mining companies in exchange for royalties on production, is planning to inject N$68 million into the Aukam graphite project in Namibia.
According to project owner Gratomic, Tristream will receive a 5% royalty on graphite sales from Aukam. It was revealed on June 17 that the two companies have signed a non-binding letter of intent, with a definitive agreement expected to be signed within three months, subject to due diligence being carried out on Tristream.
Six months after receipt of the investment, Tristream will receive the sales royalty for 5.5 years, after which the royalty will be reduced to 1% over the remainder of the mine’s life.
This is Tristream’s first investment in Africa, but the company has previously invested in lithium assets in Argentina, gold in Peru and Mexico, and zinc and silver in Asia. No resources or mineral reserves have yet been identified in the Namibian project. However, Gratomic has been operating a processing plant since 2023, with a planned production of 12,000 tonnes by November 2024.
Payment of the investment amount is conditional upon satisfactory completion of due diligence by Tristream Capital and the parties entering into a definitive agreement within 90 days of the execution of the LOI. The definitive agreement will include terms and conditions, representations, warranties, covenants and agreements customary for such a transaction. The definitive agreement will also include certain milestones to be negotiated and specified in the definitive agreement.
Gratomic is a multinational company with projects in Namibia, Brazil and Canada. The company aims to become a leading graphite supplier and to secure a strong position in the electric vehicle battery supply chain through the development of its flagship Aukam graphite mine and continuing exploration at the Capim Grosso property. The company will continue to explore graphite opportunities that show the potential to produce the specific flake size and purity required for active anodes.