The five-year agreement, signed with privately owned company Nano Graphene, will see at least 5000 tonnes of flake graphite per annum sold at a premium to Volt’s prefeasibility study basket price of $US1684 per tonne.

Volt said it would now review its production options, including third party processing, with respect to starting small-scale production in 2018 – with discussions and test work underway with numerous end user groups.

Volt CEO Trevor Matthews said securing the offtake agreement at this point in the company’s development was a remarkable achievement, particularly as a definitive feasibility study over the Namangale project in Tanzania had only recently commenced.

“This continues the positive feedback from end users and independent test-work regarding beneficial properties of Volt’s Namangale graphite concentrate,” he said.

Nano aims to start commercial graphene production in the United States later this year, with graphene produces sold to clients in the US and Europe for use in a number of sectors, including lithium-ion batteries and composites.

Nano principal Boris Goldstein said Volt’s Namangale graphite concentrate had returned excellent quality in terms of total graphitic carbon grade, the highest conductivity and demonstrably low levels of impurities.

Volt aims to secure a special mining licence over Namangale by the third quarter of this year, with the company currently working to secure environmental approval, preparing an environmental impact statement in February.

The company had about $A3 million in cash in February, bolstered by a $230,000 research and development tax credit and $125,000 from option conversion proceeds.

Volt shares last traded at 3.4c, valuing the company at $33.2 million.