Renascor Resources Share Price Continues its Stella Run (ASX:RNU)
It was only last week we took a look at the Renascor Resources Ltd [ASX:RNU] share price after it rocketed over 17% in one day after confirming a large, shallow gold target at its Soyuz prospect in SA.
The diversified explorer announced today it has entered it a further offtake agreement with a leading battery anode manufacturer.
At the time of writing the RNU share price is up 46.43% or 1.3 cents to 4.1 cents per share, more than doubling the share price in less than a week.
Graphite doing more work than gold
Today the gold and graphite developer announced it has entered into a second offtake agreement for delivery of its Purified Spherical Graphite (PSG) from its planned Battery Anode Material operation in SA.
The deal provides for the supply of up to 10,000 tonnes per annum of PSG over a period of 10 years to one of China’s leading battery anode companies, Jiangxi Zhengtuo New Energy Technology.
The offtake agreement follows the recent First Stage Product Qualification with RNU’s first offtake partner, Minguang New Material.
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Zeto is a top 10 anode producer globally, with current anode production capacity of 30,000tpa and an additional 20,000tpa under construction, planned to be in operation by 2022.
It supplies anodes to some of the world’s largest battery makers and has a current market capitalisation of around US$100 billion.
Meaning RNU could soon supply some of the biggest players in the rapidly growing battery industry.
Commenting on the Memorandum of Understanding (MOU), RNU managing director David Christensen said:
‘Our MOU with Zeto is a further significant step in Renascor’s plans to become a globally competitive Australian producer of battery anode material. Together with our recent offtake MOU with Minguang New Material, these two offtakers will account for up to two-thirds of our planned PSG production.’
RNU to sell out of graphite?
RNU said they are currently advancing offtake negotiations for the balance of its planned PSG production capacity.
These include negotiations with anode manufacturers and lithium-ion battery companies headquartered in Northeast Asia and Europe.
Drilling at its gold project is expected to commence sometime this quarter.
Which means that RNU could have its hands on two of the hottest commodities currently.
And with possible revenue streams from its PSG business trickling in, RNU might become one of the few self-sustaining gold explorers on the ASX.
Our resident gold expert, Shae Russell, reckons there’s a gold rally on the horizon this year, albeit delayed by a flying Aussie dollar.
‘The current set up isn’t great for gold miners, but the double whammy of a falling US gold price and the strong Aussie dollar presents a rare opportunity for Aussie investors to get gold on the cheap.’
Shae has also provided a longer-term positive outlook for Aussie gold stocks as Australia surpasses China as the undisputed global leader in gold exploration, mining and production. In our latest report, Shae breaks down what Australia becoming the new gold ‘epicentre’ means for gold and your Aussie gold stocks. Click here to download the free report.
For The Daily Reckoning Australia