PERTH (miningweekly.com) – ASX-listed General Mining Corporation and its joint venture (JV) partner Galaxy Resources have inked an offtake agreement for 60 000 t of spodumene concentrate from the Mt Cattlin project, in Western Australia.
The offtake agreement with two Chinese buyers was worth an estimated $36-million.
General Mining said on Tuesday that $18-million of the offtake price would be paid as a pre-payment, with the funds to be received before the end of March this year.
The JV partners have also agreed to deliver 120 000 t of spodumene concentrate in 2017 to the same Chinese customers, with a sale price to be agreed during the fourth quarter of this year, based upon prevailing market conditions at that time.
“These sales represent a tremendous step forward for the Mt Cattlin operation, and validate the work General Mining has done to re‐optimise the process flow sheet,” said General Mining executive chairperson Michael Fotios.
“The company is very pleased that it has been rewarded for a careful and prudent approach to agreeing its maiden concentrate sales, and we look forward to long and successful relationships with our new customers.”
Fotios said that beyond these initial sales, forecast demand for the company’s key product looked very robust in the short- to medium-term and General Mining, which would be the world’s largest independent supplier of spodumene concentrate in 2016, was well positioned to help meet demand from the lithium carbonate and lithium hydroxide refining markets, and the cathode market.
Based on the current mineral resource and ore reserve estimates at Mt Cattlin, the project could deliver some 11 500 t/y of spodumene over an initial 17-year mine life.
The project was estimated to require a capital investment of A$14.7-million to restart and could generate life-of-mine revenue of A$1.16-billion and net cash flow of A$526-million.