Triton Minerals (TON) has signed a binding offtake agreement with Yichang Xincheng Graphite Co., Ltd. (YXGC) for graphite produced at the Ancuabe graphite project in Mozambique.

According to the announcement this morning, the transaction not only advances Triton's plan, but also reduces Triton's plan to put Ancuabe into production through a commercial pilot plant in a small scale, low capital expenditure, and commercial viability in the short term.

Headquartered in Yichang, China, YXGC produces a wide range of graphite products, including micro-powder graphite, high-purity graphite, natural flake graphite and expandable graphite.

In the initial five-year period, YXGC has agreed to purchase 50,000 tons of graphite concentrate. Based on a minimum selling price of US$1,000 (A$1350) per ton, Triton’s net income is expected to be approximately US$50 million (A$67.39 million). ).

The transaction may be extended for another five years, adding another 50,000 tons.

"We are proud and lucky to work with a world-renowned leading graphite company that provides materials to some of the world's most outstanding electronics and technology companies," said Andrew Frazer, Triton's executive director.

"Triton has previously established a relationship with YXGC, and I am very happy that the Triton team has re-cooperated with the company... In our search for rapid development of the Ancuabe graphite project, it was initially through a commercial pilot plant."

Today's agreement replaces the earlier agreement signed in March 2015, which is related to the acquisition of the Nicanda Hill project.

It also followed the strategic review of the Ancuabe project, which focused on the establishment of a small pilot plant with an annual output of 10,000 tons, which would prove the feasibility of a large-scale plant capable of producing 60,000 tons per year.

"Our laboratory's test performance on Triton materials has far exceeded our highest expectations. We believe that the agreement with Triton shows that our company is in a good position to support and develop our diversified expandable graphite products," YXGC Director Chang Yue Xinqing said.

"The long-term supply of high-quality graphite from Triton will not only enable our company to develop competitively priced products for the global market, but will also indirectly promote the long-term economic growth of Mozambique."

As of 10:34 a.m. Eastern Australian Time, Triton Minerals' share price rose 16.28% to $0.05.