Centrex flags more offtake deals to come at Ardmore
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Special Report: Centrex boss Simon Slesarewich has flagged more offtake deals from its Ardmore phosphate project in Queensland in the next couple of months as it finished the quarter with $5.6 million in the coffers.
Speaking with Stockhead after the release of the Centrex Metals’ (ASX:CXM) quarterly yesterday, he said investors should have their eyes peeled toward the next couple of months as focuses on selling its offering to the market.
“The company has been under the radar for a very long time, and I’ve been tasked with changing that,” he said.
“I think investors haven’t quite cottoned on yet because phosphate is a rather opaque and not a mainstream commodity, so I think there’s a lack of understanding around that.”
The company should have a fair few things to talk about in the next few months, chief among which is the prospect of new offtake deals from its trial mining at Ardmore.
When asked whether investors could reasonably expect more deals within the next few months, he simply replied: “Absolutely”.
Centrex has already tied up two offtake deals one of which is with NZ-based Ballance Agri-Bullets from its pilot plant — for a combined 10,000 tonnes.
Centrex began construction of the plant in June, and is slated to produce up to 30,000 tonnes of phosphate concentrate trial shipments to customers — with the company saying the plant should be done by the end of the year.
While the initial trial mine will produce 30,000 tonnes of concentrate — the plant is easily scaled up to 800,000 tonnes per year.
A final investment decision on the full mine development is due next year with an eye towards full production by the end of 2021.
The company has been given a boost in recent times by a $500 million investment by the Queensland Government in the Northwest Minerals Province — where Centrex’s project lies.
“It’s been an absolute game-changer for us”
While the $500 million encompasses a range of measures aimed at stimulating activity in the Province, Slesarewich said a $20 million per year reduction in access fees to the Townsville rail line over four years would be huge for the company.
“It’s been an absolute game-changer for us, and we’re looking to work proactively with the government on how we can best access that with a model which facilitates the development of new projects like Ardmore,” he said.
While the company hasn’t worked out exactly how much it would be able to save on rail access charges, Slearewich said he was confident that it could have a material impact on project economics.
Aside from getting more vocal about the company, Slesarewich said the path forward was fairly uncomplicated for the company — which made it a compelling proposition.
“We’ve got a really clear path in front of us: get the trial mining done, get the concentrate to priority customers as soon as we can, that will then underpin offtake negotiations for next year and then a full financing round for the project,” he said.
“I think the critical thing, and what drew me to Centrex, was the Ardmore project. It hasn’t hit the radar yet,but it’s a very do-able project.
“It’s got a modest funding requirement to bring it into production, and it’s got good mine life of around 10 years with upside to it.”
Elsewhere, he said progress on funding under the $5 billion Northern Australia Infrastructure Fund program was going well — with the company hitting the due diligence stage.
It was also able to finish the quarter with a boost to the cash pile, now up to $5.6 million after it was able to finalise the sale of land at Port Spencer for $1.4 million.