Castle Minerals (ASX: CDT) has signed a non-binding term sheet with Ghana’s Mineral Income Investment Fund (MIIF) for a US$2 million investment aimed at advancing the Kambale Graphite Project in Ghana. This proposed agreement will finance a Prefeasibility Study (PFS) to assess the potential for producing specialized natural graphite concentrates and value-added products, particularly for lithium-ion battery anodes used in electric vehicles (EVs) and energy storage systems.

According to the term sheet, MIIF will purchase US$500,000 worth of Castle shares at a price of $0.0045 each, making it the largest shareholder in Castle. Additionally, Castle will issue one new unlisted option for every two shares purchased by MIIF, with each option exercisable at $0.0075 within 12 to 24 months of issuance. Furthermore, MIIF will invest US$1.5 million to acquire new shares in Castle’s subsidiary, Kambale Graphite Limited (KGL), which will grant MIIF a stake in the company subject to independent valuation and negotiation.

This investment will entitle MIIF to nominate a non-executive director to the KGL board and grant it preferential rights to invest additional funds during the pre-development and development phases, potentially acquiring up to a 50% interest in the Kambale Project. MIIF will also have the option to purchase up to 50% of the final processed graphite output within the country.

Executive Chairman Stephen Stone stated that this partnership with Ghana’s sovereign wealth fund will expedite the Kambale project’s progress toward a PFS and create a de-risking framework for the offtake of a significant portion of graphite production, along with the necessary development capital. He highlighted that MIIF's investment aligns with Ghana's goal to establish Sub-Sahara's first lithium-ion battery manufacturing hub, positioning the country as a leader in the global energy transition.

Stone emphasized that the fine flake graphite from Kambale is essential for lithium-ion battery anodes, with extensive testing confirming its ability to meet the stringent specifications required for this purpose. He pointed out that the project contains a substantial 22.4-million-tonne resource, supporting long-term production capacity.

Both Castle and MIIF plan to pursue a listing for the company or KGL on the Ghana Stock Exchange within two years after the Kambale Project becomes operational. MIIF Chief Executive Edward Nana Yaw Koranteng added that this investment supports Ghana's mining sector growth and provides a de-risking option for industry investors. He noted that with the investment in Atlantic Lithium, Ghana is enhancing its position in the global electric vehicle supply chain, contributing to efforts to reduce harmful emissions.

In parallel, Castle is executing a placement to raise $1.25 million to support gold-focused drilling at the Kapli Project and within the broader Wa Gold Project in Ghana. This two-tranche placement will involve issuing 500 million shares at $0.0025 each, along with unlisted options for participants.

The Kambale Project spans 149 km², located 6 km west of Wa, Ghana’s Upper West regional capital, and 640 km north of Accra and the Port of Tema. Castle Minerals is a diversified mineral explorer with assets in Ghana and Western Australia, focusing on graphite, lithium, zinc, lead, copper, and gold.