The Magnis Energy Technologies Ltd (ASX: MNS) share price has come out of a trading halt to power ahead today. This comes after the company announced it has entered into a binding offtake agreement.
At the time of writing, the battery technology company's shares are up 6% to 46.5 cents. In the first 15 minutes after market open when the news broke, the Magnis share price reached as high as 49.5 cents.
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Magnis signs supply agreement
The Magnis share price is on the move on Monday as investors appear upbeat following the company's latest update.
In its announcement, Magnis reported it has signed a legally binding offtake agreement with physical commodity trader and merchant Traxys.
This will see the future supply of natural graphite concentrate from Magnis' wholly-owned Nachu Graphite Project in southeast Tanzania.
Under the terms, the delivery of the product is valid for a period of 6 years from the commencement date. It's expected orders will begin to be fulfilled sometime in the second half of 2024.
The sales volume must be 50,000 tonnes of natural graphite concentrate within the first 12 months of the commencement date. In each of the following five delivery years, the sales volume increases to 110,000 tonnes. This equates to a total of 600,000 tonnes of natural graphite covering all flake sizes.
The pricing of the product will be set at the current market rate at the time of the delivery.
Magnis chair Frank Poullas commented:
We are really excited to have signed the binding offtake with a group of the calibre of Traxys which is a supplier of materials to many industries including lithium-ion battery manufacturers. Today's announcement follows months of providing flake graphite samples from Nachu and is a major step in securing funding for Magnis' Nachu Graphite Project.
About the Magnis share price
In the past 12 months, Magnis shares have boasted a gain of around 140% from continued positive investor sentiment. The company's share price charged higher in late October following an update on its New York Lithium-ion Battery Plant.
Although the short-term picture appears rosy, looking over a longer time period, the Magnis share price is down more than 40% across the past 5 years.
Based on today's price, Magnis has a market capitalisation of around $455.03 million, with roughly 978.56 million shares on issue.
