VANCOUVER, BC - Graphite One Inc. (TSXV: GPH) (OTCQX: GPHOF), a company aiming to establish a complete domestic U.S. supply chain for advanced graphite materials, has announced a non-binding supply agreement with Lucid Group, Inc. (NASDAQ: NASDAQ:LCID), known for producing advanced electric vehicles (EVs). The agreement, announced today, is centered on the provision of synthetic anode active materials (AAM) necessary for EV batteries.
Lucid's CEO Peter Rawlinson emphasized the importance of a robust domestic supply chain to maintain U.S. leadership in sustainable vehicle technology. The partnership with Graphite One is expected to provide Lucid with access to critical raw materials sourced within the United States for its vehicles, including its award-winning Lucid Air.
Graphite One's President and CEO, Anthony Huston, heralded the agreement as historic, marking the first of its kind between a U.S. graphite developer and a U.S. EV manufacturer. Huston also noted the support from investors and a grant from the Department of Defense. The company anticipates generating revenue by 2027, pending project financing for the construction of the AAM facility.
The chosen site for Graphite One's proposed AAM facility is a brownfield location in Warren, Ohio, previously utilized for storing critical minerals for the National Defense Stockpile. This site aligns with the company's strategy to develop a 100% U.S. domestic supply chain for both natural and synthetic graphite.
The Ohio facility is planned to have a Phase 1 production target of 25,000 tonnes per year of battery-ready anode material, with potential expansion to 100,000 tonnes per year.
The supply agreement outlines an initial five-year term, with Lucid agreeing to purchase 5,000 tonnes per annum once Graphite One commences synthetic graphite production. The financial terms are based on a pricing formula linked to future market pricing and base case pricing agreeable to both parties.
Graphite One's broader strategy includes not only the AAM facility but also a graphite mining project in Alaska and a recycling facility for battery materials, creating a circular economy approach to its supply chain.
The information in this article is based on a press release statement from Graphite One Inc.
InvestingPro Insights
As Graphite One Inc. (TSXV: GPH) (OTCQX: GPHOF) takes a significant step towards establishing a domestic U.S. supply chain for advanced graphite materials through its new agreement with Lucid Group, Inc. (NASDAQ: LCID), investors are closely watching the company's financial metrics and market performance. According to InvestingPro data, Graphite One's Price to Book ratio as of the last twelve months leading to Q1 2024 stands at a modest 0.15, suggesting that the company's market value is closely aligned with its book value. This could be a point of interest for value-oriented investors seeking assets that are not overvalued in terms of their net assets.
However, the company is facing some challenges, as indicated by a negative Operating Income of -6.89 million USD in the same period. Additionally, the Return on Assets is significantly low at -43.37%, reflecting the current stage of the company's development and the capital-intensive nature of its industry. Despite these figures, InvestingPro Tips highlight that Graphite One is expected to see net income growth this year and boasts impressive gross profit margins. These factors may be particularly relevant for investors considering the company's future profitability and operational efficiency.
Furthermore, the stock's recent performance has shown volatility with a 1 Month Price Total Return of 0.72% and a 3 Month Price Total Return of -23.08%, as of the 207th day of 2024. Investors interested in the potential of Graphite One, especially in the context of its partnership with Lucid and the growing EV market, can find additional insights and tips on InvestingPro. There are 15 more InvestingPro Tips available for Graphite One, which can be accessed through the provided link, offering a deeper dive into the company's financial health and stock performance. For those considering a subscription, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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