It’s only the beginning of the year, but already Quebec- and Sri Lanka-focused Saint Jean Carbon (TSXV:SJL) has been busy. So far, among other activities, the company has closed a private placement and acquired two lump graphite properties

However, perhaps most exciting is today’s announcement that Saint Jean has entered into an exclusive distribution agreement with China’s Miluo Xinxiang Carbon Products, an arm’s-length party. Under the agreement, which will initially be for a five-year term, Saint Jean will “market, distribute and sell a range of synthetic graphite products” in Canada, the United States and Mexico.

More specifically, during the first year of the agreement, Saint Jean will sell a minimum of 1,800 metric tons (MT) of product, with that amount rising to 5,000 MT in the second year and then increasing by 10 percent for the next three years. The companies have the option of entering two further 10-year terms following the initial five years.

In terms of what exactly Saint Jean will be selling, today’s press release states that Miluo “prepares a primary synthetic graphite product through the graphitization of petroleum coke.” When that product is mixed with a coal-tar pitch binder and heated to between 2,600 and 3,000 degrees Celsius, it turns into crystalline graphite. The material created by this process can be used “for various industry applications” — currently, Miluo’s graphite is used for lithium-ion batteries, in the aerospace sector and in the nuclear energy industry, as well as in steel manufacturing, smelting and foundries.

Commenting positively on the news, Paul Ogilivie, CEO of Saint Jean, said, “[w]e are pleased with the results of this new development. Our experience in the North American steel and foundry sectors has provided us with numerous requests for new and affordable supplies of synthetic graphite. Miluo represents an ideal source for these products. It is established, cost-effective, and actively seeking new customers and markets. As a result we think this agreement will create multiple synergies and opportunities to generate new revenues for both Saint Jean and Miluo.”

Saint Jean plans to begin customer sampling programs this month and hopes that “steady new orders” for Miluo’s graphite will start coming in during the first quarter of 2014.

Shares of Saint Jean are currently trading at $0.065 each, up 44.44 percent.

 

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Editorial Disclosure: Saint Jean Carbon is a client of the Investing News Network. This article is not paid-for content. 

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