First Graphene Limited (ASX:FGR) has signed an exclusive technology partnership deal with US-based NeoGraf Solutions LLC, the world’s leading provider of graphite materials to multiple industries.
The 10-year agreement to develop and grow the graphene market in the USA is subject to performance measures that commence with a minimum uptake of two tonnes of First Graphene’s PureGRAPH product in year one as a means to establish and build market share.
With strong expectations of growth, that will scale up to a 10-tonne minimum by year four and then in excess of 10 tonnes thereafter with precise quantities to be determined by annual review. NeoGraf will sell the PureGRAPH product line under its Graf-X brand, which is well known and has an established reputation in the US market.
Due to its repeatable specifications, high aspect ratio platelets and availability in large volumes, PureGRAPH was deemed to be a good fit with the Graf-X brand.
The tonnages referred to above are annual purchase minimums which if not achieved would result in the agreement reverting to a non-exclusive arrangement.
By way of illustration only, achieving the minimum tonnage of two tonnes in the initial year would result in revenues of between A$305,000 and A$375,000 annually depending upon the mix of product categories ordered.
Achieving the increased anticipated minimum in year four of 10 tonnes would result in revenues of between A$1.5m and A$1.8m annually, again depending on product mix and based on current pricing models.
Product mix making up the annual tonnages (and therefore pricing and overall revenues) may vary as NeoGraf will market First Graphene’s Australian-manufactured products to different mutually agreed market segments.
NeoGraf is an established leader in graphite material science, developing a range of environmentally sustainable, innovative graphite solutions targeted to a broad range of industrial applications. The agreement with First Graphene provides NeoGraf with graphene products and solutions to enhance its range and industry reach within the US market.
This deal provides a direct path into several established and emerging sectors in the US,” First Graphene Managing Director and CEO Michael Bell said.
“ Not only is NeoGraf a well known, US-based company, but it has a strong reputation and relationships with key organisations in target industries that know and understand how graphene can benefit them.
“The deal is governed by a range of performance criteria focused on developing the market and we are excited to be establishing this long-term, mutually beneficial relationship with NeoGraf.”