Offtake and funding deal helps drive MRC strategy
PERTH (miningweekly.com) – ASX-listed Mineral Commodities (MRC) has struck a non-binding offtake and funding agreement with industrial garnet provider GMA Group.
Under the terms of the agreement, MRC has agreed to supply GMA Group with 80 000 t/y of finished garnet product between 2024 to 2025, 105 000 t/y between 2026 and 2028, and subject to renewal, with 125 000 t/y between 2029 and 2033.
GMA Group would provide MRC with $10-million loan funding, repayable over five years from the start of 2024, on commercial terms, to fund the design and construction of a 250 000 t/y to 300 000 t/y garnet and ilmenite mineral separation plant (MSP) in the Western Cape region of South Africa.
MRC told shareholders on Tuesday that the agreement aligned with the company’s strategic plan to transition into higher value finished products, with construction of the MSP aiming to be completed by the December 2023 quarter.
The strategic plan aims to maximise the value of its mineral sands operations by maximising final product value through transitioning from mixed concentrates to finished garnet and ilmenite mineral products.
"We’re very pleased to extend our long-term partnership with GMA Group from concentrate sales to finished garnet products. This offtake agreement forms the foundation of expanding our revenue base and profitability at Tormin,” MD and CEO Jacob Deysel said.
“To provide context, the Tormin operation produced 145 000 t of garnet concentrate in 2021, highlighting that this minimum offtake agreement will cover most of the available finished garnet produced from current operations. The GMA funding agreement also allows construction of an ilmenite MSP, with ilmenite finished product to be sold into the lucrative, well established finished ilmenite market.
“We welcome the opportunity to renew and formally extend our long-standing relationship with GMA and explore new opportunities to expand our mutually beneficial commercial interests,” said Deysel.
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