PERTH (miningweekly.com) – Mineral sands developer MZI Resources has secured another offtake partner for its Keysbrook project, in Western Australia, announcing on Monday that it had signed a key sales agreement covering all the zircon concentrate that would be produced at the project.

The offtake agreement was signed with Tricoastal, which is the largest mineral sands processor in China, and also a 4.6% shareholder in MZI.

Under the agreement, Tricoastal would buy all the zircon concentrate produced at the Keysbrook project over a five-year period, with an option to extend the offtake agreement by a further five years.

MZI CEO Trevor Matthews said on Monday that the Tricoastal agreement was important as it continued the strong relationship between the two companies and would see Keysbrook zircon sold into the Chinese ceramic market.

It also marked another step towards the development of the Keysbrook project.

MZI currently had sales agreements in place over half of the forecast yearly revenue from Keysbrook, and around 60% of the forecast yearly production. The ASX-listed developer was now in discussions with a number of parties about an offtake agreement of the titanium dioxide product.

“With negotiations on the remaining part of the debt package now in the final stages, and well over half of our forecast production covered by offtake agreements, we are now on the cusp of developing this highly robust project,” said Matthews.

Once in full production, the Keysbrook project would produce 91 000 t/y of product from 110 000 t of dry heavy mineral concentrate. First production was currently scheduled for the December quarter of 2014.

In October, MZI secured a $41.5-million funding package to develop the mineral sands project. The package consisted of three components, with the first $3.5-million payment in consideration for the purchase of a 2% gross revenue royalty from all minerals produced from the Keysbrook project.

The second $21-million portion of the funding was classified as a convertible loan facility that would be used to fund development costs associated with the Keysbrook project.

The third portion of the funding consisted of a $17-million bridging loan facility that would be split into two tranches. The first tranche of $7-million would go towards funding the debt service reserve account requirements, while the second tranche of $10-million would be used for corporate purposes.