Photo credit: Mayur Resources
Mayur Resources Limited has executed a binding offtake agreement with titanium pellet producer Qingdao Shinebest for the sale of vanadium titanomagnetite (magnetite) product from the Orokolo Bay Iron and Industrial Sands Project.
The Agreement replaces and improves the previously announced offtake with Shinebest, including increasing the contracted volume and term (see MRL ASX release dated 13 March 2019).
The Agreement is conditional upon entering operations by 30 June 2023, and a subsequent trial shipment of 30,000 tonnes performing to the satisfaction of Shinebest (as specified in the Agreement).
The key terms of the Agreement include:
- Annual contract minimum volumes of 300,000 tonnes (±10%) of Product for an initial 3-year period, with the ability to mutually extend the term by a further year (total 4 years);
- Product pricing formula based on the prevailing Platts 62% Fe iron ore pricing index (IODEX) with the application of a discount factor to adjust for the iron and titanium quality of the Product;
- Pricing subject to a floor price mechanism, whereby if IODEX is below US$60 per tonne then there is no obligation to supply Product under the Agreement;
- Agreed Product quality and specifications, as well as bonus and penalty payments that are standard for an Agreement of this nature;
- CIF delivery terms apply; and
- Force Majeure and other internationally recognised standard commercial terms apply.
Mayur Managing Director, Mr Paul Mulder, commented, “We are pleased to have revised our Agreement with Shinebest for approximately 60% of planned production from our fully permitted and construction ready Orokolo Bay Iron and Industrial Sands Project. Combined with the term sheet we executed with a leading Japanese trading house in December last year, the significant majority of the expected magnetite production from Orokolo Bay is now under some form of offtake agreement. The execution of this agreement with Shinebest provides investors, financiers and other stakeholders, future revenue certainty in continuing to progress the projects construction plans, with funding partners in the private and public space.”
Article courtesy of Mayur Resources
