Green Critical Minerals Secures 80% Stake in McIntosh Graphite Project, Legal Dispute Delays Joint Venture

Green Critical Minerals (GCM) announced a significant milestone on November 25, 2024, with its subsidiary GCM Graphite Pty Ltd successfully completing Stage 3 of the earn-in agreement for the McIntosh Graphite Project in Western Australia. This achievement grants GCM an 80% ownership stake in the project, following an investment exceeding $4 million over a two-year period dedicated to exploration and development activities.

"We are pleased to confirm that GCM Graphite has fulfilled all requirements for the Stage 3 earn-in at the McIntosh Graphite Project," said Green Critical Minerals in a statement. "This marks a significant step forward for the company, solidifying our position in this high-potential graphite resource."

The McIntosh Graphite Project holds significant value for Green Critical Minerals. It is considered Australia's fourth-largest graphite resource, boasting an estimated 1.1 million tonnes of contained graphite.

"The project offers high-purity flake graphite with excellent properties for lithium-ion batteries," Green Critical Minerals highlighted. "This positions it strategically for capitalizing on the growing demand for critical minerals in the clean energy sector."

Beyond the resource itself, the project enjoys a favorable location with access to a deep-water port, offering ease of transportation to key customer markets in Asia, Europe, and the US.

The next phase involves establishing a joint venture (JV) with Hexagon Energy Materials Limited to further explore and evaluate graphite within the project tenements. However, the formation of this JV has been met with an unexpected hurdle.

While both companies reportedly agreed on the terms of a formal agreement, Hexagon has withheld its signature due to ongoing legal proceedings in the Supreme Court of Western Australia. The dispute centers around Hexagon's counterclaim alleging that GCM did not comply with the Stage 2 earn-in requirements outlined in the binding term sheet.

"We are confident that we have met all stages of the earn-in by spending in excess of $3 million on exploration," GCM countered in their announcement. "GCM Graphite Pty Ltd has recently lodged a defense to Hexagon's counterclaim and will continue to prosecute its claim in the event the dispute cannot be resolved on a commercial basis."

The announcement further reveals that a confidential mediation attempt in the Supreme Court recently took place but was ultimately adjourned. The outcome of these legal proceedings will determine the fate of the proposed JV and the future course of the McIntosh graphite project.

The legal dispute casts a shadow of uncertainty over the immediate future of the McIntosh project. While Green Critical Minerals remains confident in its position and committed to pursuing its claims, the ongoing litigation could potentially delay the formation of the JV and hinder further exploration and development activities.