Mineral Commodities resolves offtake dispute, banks ~$23m cash
Special Report: An offtake dispute has now been resolved, providing operational certainty — and a welcome cash injection — for mineral sands miner Mineral Commodities (ASX:MRC).
Mineral Commodities (ASX:MRC) is a leading producer of zircon, rutile, garnet and ilmenite concentrates through the world-class, long-life Tormin mineral sands operation in South Africa.
MRC is currently focused on commissioning the high-grade Northern Beaches and Inland Strand mining operations, which were recently granted under a Section 102 Expanded Mining Right.
In August, a dispute with global company GMA Group over a life-of-mine garnet offtake agreement resulted in MRC terminating that deal. Those issues have now been resolved, MRC says.
Settlement terms will see GMA Group pay MRC an outstanding receivable under the old agreement of ~$US15.3m ($21.1m) in the next two days, and a further $US1.4 ($1.9m) on the next shipment of stockpiled garnet.
The parties will also ink a new non-exclusive offtake agreement commencing 2021 for the supply of 100,000t per annum of garnet concentrate for three years, with automatic annual renewals thereafter.
“The settlement of these matters and the reinvigoration of our commercial relationship with GMA allows our company to move forward with certainty as to our rights and obligations with our key offtake partner during these globally uncertain times, with increased flexibility in our supply-side options for the sale of our product mix,” MRC exec chairman Mark Caruso says.
“We thank GMA’s new executive management for their genuine efforts in resolving this matter.”
This story was developed in collaboration with Mineral Commodities, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.