After having secured a 40 year mining permit, NextSource Materials (NEXT.TO) has now also been granted the Global Environmental Permit for its Molo Graphite project in Madagascar. This means the high-margin graphite project has now received all permits and approvals allowing it to start operations.
With the permits now in hand, the next obvious step for NextSource Materials is to secure project funding to effectively build the graphite mine. With binding offtake agreements with ‘a prominent Japanese Graphite Trading Company’ already secured, it shouldn’t be too tough to finance the construction of the mine, and we expect to see more clarity and details on the funding mix over the next few months. Bigger isn’t always better (ask Syrah Resources), and the smaller scale approach of NextSource Materials – which does have binding commitments in place to sell 20,000 tonnes per year of its high-quality ‘Superflake’ product– should ensure healthy operating margins for this C$40M market cap company.