WESTERN Mining Network has executed a definitive agreement to acquire PT Grafindo Nusantara (GFN), Indonesia’s leading private graphite company which has 8 million JORC-compliant tonnes of graphite in West Kalimantan. The significant expansion of Western’s Indonesian resource base sets the stage for the company’s next phase of development.

Western is acquiring GFN in return for 25 million new Western shares and there is no cash consideration.

GFN holds two major tenements in the Jangkang district, one of which, TST, is primed for development with an established JORC resource on the Balai Sebut deposit and a mining licence valid until July 2023. There are excellent logistics, including a mostly paved road to the provincial capital of Pontianak.

Preliminary estimates indicate a resource grade in excess of 10% graphitic carbon, placing the asset in a unique class on a global scale. The ore delineated hosts a large proportion of flake graphite, which is the raw material required by battery manufacturers.

GFN has carried out extensive work on the mineralogy and a portion of the ore zones has been mined for bulk sampling purposes. Work on the adjacent exploration property has defined 10 more graphite prospects, providing significant upside.

Western says the tenements add to the portfolio of graphite mining assets it is acquiring to build an integrated carbon business with its technology and industrial partners. In combination with its Tamboli asset in Central Sulawesi, the GFN properties strengthen Western’s long-term plan to use Indonesian graphite to feed into a larger downstream business in Asia.

Several years of research has been done on TST, leading to a high level of confidence in the quality of the product that can be produced. GFN has developed an alliance with several Indonesian universities and has funded several research projects on graphite based technologies and graphene applications. It also has an experienced local team in place capable of moving the project into the development phase and beyond.

Western says the TST tenement forms an important part of its scoping study which is expected to be completed in the first half of 2016. Further resource definition work is under way to upgrade the JORC status.

Meantime, Western has secured an Aus$6 million share placement with UK institutional investor Lanstead Capital which will be used to advance its Indonesian work. Lanstead is expected to be a valuable source of feedback and advice for Western based on its decades of market experience.