PERTH (miningweekly.com) – ASX-listed Australian Mines was hoping to finalise and execute a binding offtake agreement with SK Innovation during the current quarter.

The company on Thursday moved to allay shareholder concerns regarding media speculation around the binding offtake agreement, which was initially launched in February last year, for the sale and purchase of all the cobalt sulphate and nickel sulphate to be produced from the Sconi cobalt/nickel/scandium project, in Queensland.

The company told shareholders that despite speculation to the contrary, SK Innovation had all intention to execute a final long-form offtake agreement with Australian Mines.

The companies have now mutually agreed to extend the period in which Australian Mines could finalise the funding package for the Sconi project until September 2019, to accommodate the North Australian Infrastructure Facility’s current due diligence and investigation into potentially providing support for the Sconi project.

“The fact that we are able to work with SK Innovation to agree a new deadline of September for financing without any resistance or renegotiation of other terms is evidence of the collaborative relationship we continue to enjoy with the Korean electric vehicle battery manufacturer and their support of Sconi’s future development,” said Australian Mines MD Benjamin Bell.

“Although we appreciate the extension of the financing condition to September, given the progress we have been making on these negotiations since the bankable feasibility study (BFS) was released, we plan to have the entire project funding package in place by the second quarter of 2019.”

The BFS has estimated a capital cost of $974-million to develop the two-million tonne a year Sconi project, producing some 8 496 t/y of cobalt sulphate and 53 301 t/y of nickel sulphate over a mine life of 18 years.

Under the March binding offtake agreement, SK Innovation is entitled to a modest commercial-in-confidence buyer discount on the base price, provided the Korean firm subscribed for 669-million Australian Mines shares three months following the release of the BFS.

SK Innovation had until February 20 to acquire these shares, pending Australian Mines shareholder approval.