Glenover signs heads of agreement for potential offtake deal
JOHANNESBURG (miningweekly.com) – Aim-listed Galileo Resources’ 36%-owned Glenover Phosphate subsidiary has signed a heads of agreement for a potential offtake deal with an undisclosed major phosphate and fertiliser producer.
Under the terms of the agreement, Glenover will supply the fertiliser producer with raw phosphate rock in the form of flotation concentrate from its project in Limpopo.
The Department of Mineral Resources has accepted Glenover's application for a mining right over the project and Glenover has started the requisite environmental impact assessment programme.
If the mining right is granted, Galileo’s beneficial interest in the project will increase to 38%.
"Galileo and joint venture partner Ferminore have been in discussions with various interested groups concerning the development of the project. One group has already carried out extensive bench scale test work and has entered into a preliminary offtake agreement, with pilot scale testing remaining the main hurdle to [the conclusion of] a binding agreement,” CEO Colin Bird said in a statement.
The heads of agreement is subject to the parties entering into a definitive supply agreement by April 30, otherwise it will terminate.
The fertiliser producer requires further pilot scale work to determine the suitability of the phosphate rock in its process as one of the main conditions precedent, but further capital expenditure by the fertiliser producer for the second phase pilot scale test work will be subject to the parties agreeing on the main commercial terms in the heads of agreement.
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