GCM Graphite, a subsidiary of Green Critical Minerals, has acquired an 80% stake in the McIntosh graphite project in Western Australia after meeting stage three earn-in conditions. This milestone follows an investment of over $4 million (A$6.13 million) in the project over two years.
The earn-in agreement with Hexagon Energy Materials was formalized in a binding term sheet, with Green Critical Minerals completing the first two stages by February 2022.
The McIntosh project, renowned as Australia’s fourth-largest graphite resource, boasts 1.1 million tons of contained graphite.
It features high-purity flake graphite ideal for lithium-ion batteries and benefits from strategic access to a deep-water port and markets in Asia, Europe, and the United States.
The next step in the project involves forming an unincorporated joint venture (JV) with Hexagon Energy Materials for further exploration and evaluation.
However, Hexagon has refrained from finalizing the JV agreement, citing ongoing legal proceedings in the Supreme Court of Western Australia.
Hexagon alleges that GCM Graphite failed to comply with the binding term sheet during stage two of the earn-in process. GCM disputes this, asserting it fulfilled all requirements by investing more than $3 million in exploration.
GCM has filed a defense against Hexagon’s counterclaims and has expressed readiness to pursue legal action if a commercial resolution is not achieved
A confidential mediation session was recently adjourned, leaving the dispute unresolved. The outcome of the legal proceedings will determine the future of the JV and the progression of the McIntosh graphite project.
The project’s significant potential for graphite production remains pivotal to its strategic importance, particularly as demand for battery materials continues to rise globally.
However, the legal conflict underscores the complexities of advancing resource projects in a competitive market.
