PERTH (mininwgeekly.com) – ASX- and Aim-listed Sovereign Metals has entered into a non-binding memorandum of understanding (MoU) with global rutile product distributor Hascor International to potentially supply up to 25 000 t/y of rutile from the Kasiya rutile project, in Malawi.
The supply agreement would cover an initial five-year period from the start of nameplate production. Offtake volumes could be by mutual agreement, while pricing at the start of the offtake agreement would reference market prices to the welding sector subject to agreed price variations through the supply term.
Sovereign told shareholders on Thursday that this maiden MoU is part of the company’s product marketing strategy as the demand and pricing for natural rutile are both very strong as the global structural deficit in supply continues to widen.
“We are very excited to have signed this MoU with a major rutile supplier like Hascor about a future offtake agreement and to provide input on marketing for our premium rutile products from Kasiya,” said Sovereign MD Dr Julian Stephens.
“Hascor is a market leader in natural rutile product development and distribution for the welding industry across five continents. The offtake MoU with Hascor points to the quality and strategic nature of our world-class Kasiya rutile project.”
The MoU is nonexclusive and nonbinding and remains subject to negotiation and execution of a definitive agreement to give effect to the MoU. The MoU will expire at the end of December 2023 but can be extended by agreement by both parties should a definitive agreement not have been reached by that time.
Sovereign’s Kasiya project has a current mineral resource estimate of some 605-million tonnes at 0.98% rutile.
A December scoping study estimated that a 12-million-tonne-a-year operation could have a mine life of 25 years, with the project expected to require a capital investment of $332-million.