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Triton Minerals Study Underscores Vertical Integration Graphite Upside

Triton Minerals (ASX:TON) has revealed an economic study underscores the economic advantages from a strategy of vertical integration at its Nicanda Hill graphite project in Mozambique.

The study is part of modelling for the Definitive Feasibility Study and highlights that value adding in Mozambique by Triton provides for a more rapid return on investment and increased profit margins in the near term.

This would be by a factor up to 5 to 10 times greater than export of graphite concentrate alone.

With a graphite resource base among the highest in the world, Triton can lay claim to a long life and certainty of supply to support establishment of valued added spherical and enhanced graphite products factories at Nicanda Hill.

Nicanda Hill is the largest known high grade graphite deposit with an Indicated and Inferred Resource of 1,457 million tonnes at 10.7% Total Graphitic Carbon (NYSEMKT:TGC) and 0.27% Vanadium Pentoxide.

While at Ancuabe, there is an ability to access some of the world's best quality and flake graphite distribution.

The internal economic assessment found that the establishment of spherical and enhanced graphite products factories at Nicanda Hill and in-country manufacturing will earn development and tax incentives from Mozambique Government.

High value products, such as graphite composite material, graphite sheets and foils, spherical graphite are currently in high demand in the broader and larger energy storage and electronics markets.

Graphene production from Nicanda is also a possibility over time.

Brad Boyle, managing director, commented:

"The recent confirmation that TMG can produce a wide range of high quality graphite products, including a full range of high grade flake graphite concentrates, graphite composite material, graphite sheets and foils, spherical graphite and graphene, places Triton in a unique position to supply a broad and diverse market base.

"Triton currently has the largest known graphite deposit in the world which provides longevity and certainty of supply. The high quality nature of the TMG products and the strong support of the Mozambique Government will allow Triton to rapidly advance all the projects and operations.

"Triton is focused on an in-country value-adding strategy as it is the logical step to utilise the established and future infrastructure, maximising the value of TMG products before selling and transporting them elsewhere.

"Finally, Triton's strategy aligns with the new fiscal and mining regimes of the Mozambique government and provides the company the advantage of obtaining a number of development incentives and rebates which are associated with in-country value adding."

Reduce CAPEX and OPEX

Key benefits of value-adding of the TMG products on site at Nicanda Hill include the use of established mine infrastructure, power and water.

This would help to reduce capital and operating costs for the joint venture project and the in-country value adding process is aligned with the current objectives of the Mozambique fiscal and mining regimes.

Additional benefits of a vertically integrated business

The study identified:

- Significant tax and import/export incentives that are not available to mining-only operations;
- Integrated DFS financial modelling will include mine-gate concentrate production costs rather than FOB costs;
- Integrated DFS financial modelling will incorporate value-added sales prices which can be greater than US$2,500/tonne for expanded graphite, US$6,000/tonne for composite graphite material and up to US$50,000/tonne for graphite foils;
- Longevity and certainty of supply from Triton's long life, high grade graphite deposit of 20 years (2 million tonnes) binding off take with Yichang Xincheng Graphite Co., Ltd (YXGC) of graphite concentrate, for both expanded and composite graphite products;
- Binding joint venture agreements with YXGC to produce composite graphite products generates an internal supply demand for the TMG which is both independent and not reliant on the broader global graphite market;
- Ability to produce a high quality, competitively-priced, full range of flake graphite concentrate grades and sizes that can be customised for end user requirements;
- Ability to produce high quality enhanced graphite products that can be customised for end user requirements;
- Ability to produce competitively-priced spherical graphite on site at production levels that can customised to suit market requirements and demand;
- By producing spherical graphite on-site, there is less wastage as only the high-value product will be transported to clients. Costs of transporting concentrate destined for off-shore spherical graphite production, of which up to half will be discarded as waste can be avoided.
The current Nicanda Hill DUAT application will incorporate the spherical and enhanced graphite products factory facilities, such that a separate DUAT application will not be required;
- The current Environment Impact Assessment (NYSEMKT:EIA) application will incorporate the factory facilities at Nicanda Hill; and
- The factories and concentrator will share the same energy and water sources, thus avoiding duplication of capital and operating costs.

Trion also has the newly discovered P66 zone at the Balama North project.

High recovery and purity

Bulk sample test work undertaken by SGS Lakefield, Perth on standard Nicanda Hill graphite material (100) has achieved high recovery and purity results.

Latest test results have confirmed the Nicanda Hill graphite concentrate can be readily upgraded to 99% purity through simple flotation.

Importantly, this would mean that there is no need for chemical leaching, reducing the overall production costs and increasing TMG product options at Nicanda Hill and Ancuabe based on this work.

Possible expansion of DFS

As a result of the encouraging recent results with TMG products, Triton is reviewing options to expand the scope of the current DFS to include the P66 zone as well as the vertical integrated facilities at Nicanda Hill.

This could also include the Ancuabe project, subject to further exploration success.

Analysis

All told, these developments are extremely positive for Triton's DFS and vertically integrated graphite strategy.

It also positions TMG as one of the lowest cost and with the most diversified graphite product range backed by the longevity and reliable supply source of premium quality flake graphite.

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