Gratomic Signs Letter of Intent to Acquire 100% Interest in Brazilian Graphite Exploration Project

TORONTO, ON / ACCESSWIRE / August 13, 2021 / Gratomic Inc. ("Gratomic", "GRAT" or the "Company") (TSXV:GRAT)(OTCQX:CBULF)(Frankfurt:CB82) is pleased to announce that the Company has entered into a letter of intent with Zumbi Mineração Brazil ("Zumbi") and the shareholders of Zumbi (collectively the "Vendors") for the acquisition of 100% of the rights and interests in and to the "Capim Grosso Property" (the "Acquisition") comprising mineral claim 870.180/2012 (426.03 Ha) located in Capim Grosso, BA, Brazil (the "Target Property").

In consideration for a 100% interest in the Target Property, Gratomic will, upon closing of the Acquisition (the "Closing"): (i) make a one-time cash payment equal to CAD $ 200,000; (ii) issue that number of common shares ("Common Shares") in the capital of GRAT (the "Subject Shares"), as is equal to the number arrived at by dividing CAD$2,300,000 by the price per Common Share at the date of the execution of the definitive agreement relating to the Acquisition; and (iii) issue a promissory note in the amount of CAD$3,000,000 payable on the earlier to occur of: (a) that date which is twenty (24) months after Closing; and (b) ten (10) business days after the receipt by GRAT of a pre-feasibility study in respect of the Target Property completed in accordance with and pursuant to National Instrument 43-101 "Standards of Disclosure for Mineral Projects". The Subject Shares will be issued as directed by the Vendors and will be subject to a four month and one day hold period from the Closing.

The Vendors will also retain a 3% gross smelter return royalty (the "Royalty") in respect of all minerals processed from the Target Property, other than graphite, on the terms and conditions set forth in a gross smelter royalty agreement, which shall contain the usual covenants, agreements, terms and conditions for a royalty agreement (the "Royalty Agreement"). The Royalty will be reduced by any pre-existing net smelter royalties in respect of the Target Property.

Acquiring the Brazilian graphite project provides Gratomic the opportunity to diversify the Company's interests and develop the graphite deposit at the Capim Grosso project. This strategically positions the Company to better meet growing demand for high quality graphite and provides a significant competitive advantage by limiting risk through business development in several key mining friendly jurisdictions.

The Capim Grosso graphite project is located within the São Francisco Craton (SFC). The SFC is a tectonic domain surrounded by Neoproterozoic orogens. Its southern sector is composed by Archean crust, with age between 3.5 and 2.6 Ga, that is formed mostly by granite-gneisses and greenstone belts constituted by mafic-ultramafic, intermediate-felsic volcanic and volcanoclastic rocks with terrigenous sediments. Graphite at Capim Grosso is set within NW-SE striking ultramafic units.

The Vendors of the project have completed three preliminary drillholes and 10 shallow trenches over a 1 km part of the mineralisation. Assay results show total graphitic carbon (TGC) of between 6.79 % TGC over 2.5 m to 20.95 % TGC over 2.4 m in surface trenching. Drilling results of 26.47 % TGC over 1 m have been obtained. While the QP has visited the sites, assays have not been verified and true mineralisation widths have not yet been obtained.

Immediately following Closing, Gratomic will commence a trenching program to generate further geological information and plan future drilling. The Company has collected verification samples on the property and has sent these to SGS Geosol Brazil for umpire analysis. These form part of the prequalification conditions to conclude the transaction.

Arno Brand, President and CEO commented, "Obtaining the Capim Grosso Project will serve as our base in Brazil, the largest graphite producer outside of China, as we plan to expand operations. The Company has reviewed projects all around the world and considers Zumbi to be one of the most promising."

Armando Farhate, COO & Head of Graphite Marketing and Sales stated, "Bringing Gratomic to my home country has a touch of personal satisfaction to me. Having worked for the largest and most traditional graphite producer in the country gives me the required experience to support Gratomic on this very strategic move towards becoming a key player in the graphite world."

The Acquisition is subject to satisfactory completion of a due diligence review of Zumbi and the Target Property by Gratomic, the determination of the appropriate structure of the Acquisition and execution of a definitive agreement relating to the Acquisition. The Acquisition (including the issuance of the Subject Shares) is subject to the fulfillment of certain conditions precedent as are customary for transactions of this nature including the approval of the TSX Venture Exchange.

Nico Scholtz is a consulting geologist and has reviewed and approved the scientific and technical information in this news release. Mr. Scholtz is a registered Professional Natural Scientist with the South African Council for Natural Scientific Professions (Pr. Sci. Nat. No. 400299/07). Mr. Scholtz has reviewed and approved the scientific and technical information in this press release and is the Company's "Qualified Person" as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects.