Ceylon Graphite Corp. (“Ceylon”) (TSX-V: CYL) (OTC: CYLYF) (FSE:
CCY) announces that the original news release captioned “CEYLON
GRAPHITE ANNOUNCES MOU FOR JOINT VENTURE WITH STRATEGIC PARTNER TO
DEVELOP AND OPERATE ADDITIONAL NEW GRAPHITE MINES AND A LOCAL
UPGRADING FACILITY TO MEET GLOBAL BATTERY ANODE NEEDS”, published
on July 7, 2021, referred, incorrectly, to LOLC Holdings PLC (LOLC)
as Lanka ORIX Leasing Company Group in the first paragraph. With
the exit of ORIX Corporation of Japan in March 2018, LOLC Holdings
PLC no longer uses its former name Lanka Orix Leasing Company PLC.
All other disclosures were correct.
After some inquiries from shareholders, Ceylon
would like to highlight from the July 7, 2021 press release LOLC
intends to purchase up to an aggregate of 15% of Ceylon shares
either as a lead order on a future financing or under separate
terms with timing and terms to be detailed in a definitive
agreement. We view the strong financial backing from LOLC as a
strong validation of our assets and management team that this deal
brings.
Furthermore, the company remains focused on
bringing operations at K1, M1, H1, P1 as well as six other
potential sites under development into production, having combined
production potential of 50,00 tonnes per year. The LOLC JV will
bring a minimum of three other mines into production with Ceylon
off taking all the graphite. This is expected to significantly
increase Ceylon’s future production growth profile.
“These are exciting times as we are on the cusp
of being able to generate and grow significant high-margin free
cash flow to Ceylon’s shareholders and strategic partners,” stated
Don Baxter, CEO of Ceylon Graphite.
The corrected news release is as follows:
CEYLON GRAPHITE ANNOUNCES MOU FOR JOINT
VENTURE WITH STRATEGIC PARTNER TO DEVELOP AND OPERATE ADDITIONAL
NEW GRAPHITE MINES AND A LOCAL UPGRADING FACILITY TO MEET GLOBAL
BATTERY ANODE NEEDS
Ceylon Graphite Corp. (“Ceylon”) (TSX-V: CYL)
(OTC: CYLYF) (FSE: CCY) is pleased to announce the execution of a
Memorandum of Understanding dated June 30, 2021 (the “MOU”) with
two subsidiaries of LOLC Holdings PLC (“LOLC”). Pursuant to the
MOU, Ceylon Graphite, through its subsidiary, Plumbago Refining
Corp B.V. (“Plumbago”), and LOLC, through its subsidiaries LOLC GEO
Technologies Ltd. (“LOLCGT”) and LOLC Advanced Technologies Ltd.
(“LOLCAT”), will work together to develop new graphite mines
outside of the existing Ceylon portfolio, and to construct and
operate a state-of-the-art graphite processing facility in Sri
Lanka.
LOLC is the largest corporate conglomerate in
Sri Lanka. It recorded the highest profitability in Sri Lankan
corporate history in FY 20/21, with LKR 57B (US $285MM) Profit
before Tax. LOLC’s portfolio includes leisure, plantations,
agri-inputs, renewable energy, construction, manufacturing and
trading and other strategic investments, with micro-finance
enterprises expanding out to Cambodia, Myanmar, Pakistan,
Indonesia, Philippines, Zambia and Nigeria. LOLCGT is the mining
arm of LOLC and holds several exploration licenses from the Sri
Lanka governments Government Survey and Mining Bureau (“GSMB”).
LOLCAT is the research arm for LOLC Group, and a joint owner of Sri
Lanka’s first graphene and advanced material company, currently
producing graphene from ultra-pure highly crystalline Sri Lankan
graphite, and making significant advances in a variety of
breakthrough applications involving graphene. The MOU provides for
Ceylon and LOLC to develop and operate a minimum of three mines on
grids located near the Government owned Kahatagha Mine, an area
known to be rich in high-grade vein graphite, as high grade as 98%
Cg. Under the MOU, Ceylon intends to purchase a 10% interest in
LOLCGT with an option to buy up to 40% of the company. The
development of the new mines will be funded on a pro rata basis,
will be operated by Ceylon, and Ceylon will agree to offtake all
mine production for further processing.
Further, Ceylon and LOLC will construct an
in-country value-add facility to upgrade the mine product further
to 99.99% purity, ready for spheronization. This mine production
will be in addition to Ceylon’s existing and planned mining
operations at K1, M1, H1, P1 as well as six other potential sites
under development.
Under the terms of the MOU, LOLC intends to
purchase up to an aggregate of 15% of Ceylon shares either as a
lead order on a future financing or under separate terms with
timing and terms to be detailed in a definitive agreement.
Both parties will also agree to
cross-appointments of designates to their respective corporate
boards.
“We are excited to embark on this joint venture
together with LOLC Group, the most profitable company in Sri Lanka,
led by Mr. Ishara Nanayakkara, one of the most respected business
leaders in Asia, whose extraordinary vision aligns with Ceylon’s
goals in graphite and graphene applications,” stated Don Baxter,
CEO of Ceylon Graphite. “We’re delighted LOLC is eager to support
the joint venture’s technical strategy to produce a minimum of
50,000 to 100,000 tonnes per year of unparalleled quality
spheronized graphite for the rapidly growing anode applications
market as well as to collaborate with us and share successes in the
graphene production technology.”
“LOLC is pleased to partner with a
well-established graphite production company like Ceylon,” said,
Danesh Abeyrathne, CEO of LOLC AT. “Together we can work to capture
a greater share of the world’s battery anode and graphene
applications markets, than we can working separately. This will
benefit both our companies as well as the people of Sri Lanka in a
significant way.” The MOU is non-binding and signals the intent of
both parties to negotiate in good faith a definitive agreement to
reflect the intent and content of the MOU. There is no assurance
that such an agreement will be reached.
Qualified Person
Donald K.D. Baxter, P. Eng. is a Qualified
Person under National Instrument 43-101 and has reviewed and
approved the technical information provided in this news
release.
About Ceylon Graphite Corp. Ceylon Graphite is a
public company listed on the TSX Venture Exchange that is in the
business of mining for graphite, and developing and commercializing
innovative graphene and graphite applications and products.
Graphite mined in Sri Lanka is known to be some of the purest in
the world and has been confirmed to be suitable to be easily
upgradable for a range of applications including the high-growth
electric vehicle and battery storage markets as well as
construction, healthcare and paints and coatings sectors. The
Government of Sri Lanka has granted the Company’s wholly owned
subsidiary Sarcon Development (Pvt) Ltd. an IML Category A license
for its K1 mine and exploration rights in a land package of over
120km². These exploration grids (each one square kilometer in area)
cover areas of historic graphite production from the early
twentieth century and represent a majority of the known graphite
occurrences in Sri Lanka.
Further information regarding the Company is
available at www.ceylongraphite.com.
Don Baxter, Chief Executive Officer
info@ceylongraphite.com
Corporate Communications
1 604-765-8657
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in 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
information as such term is defined in applicable securities laws,
which relate to future events or future performance and reflect
management’s current expectations and assumptions. The
forward-looking information includes statements about Ceylon
Graphite’s grids, Ceylon Graphite’s plans to undertake additional
drilling and to develop a mine plan, and to commence establishing
mining operations. Such forward-looking statements reflect
management’s current beliefs and are based on assumptions made by
and information currently available to Ceylon Graphite, including
the assumption that, there will be no material adverse change in
metal prices, all necessary consents, licenses, permits and
approvals will be obtained, including various Local Government
Licenses and the market. 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. Risk factors that
could cause actual results to differ materially from the results
expressed or implied by the forward-looking information include,
among other things, an inability to reach a final acquisition
agreement, inaccurate results from the drilling exercises, a
failure to obtain or delays in obtaining the required regulatory
licenses, permits, approvals and consents, an inability to access
financing as needed, a general economic downturn, a volatile stock
price, labour strikes, political unrest, changes in the mining
regulatory regime governing Ceylon Graphite, a failure to comply
with environmental regulations and a weakening of market and
industry reliance on high quality graphite. Ceylon Graphite
cautions the reader that the above list of risk factors is not
exhaustive.
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