Mineral sands play Strandline has already sold 100pc of production from undeveloped mine
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All production – and forecast revenue — from Strandline Resources’ undeveloped Fungoni minerals sands mine in Tanzania is now covered by binding ‘take or pay’ contracts with customers.
A take-or-pay contract means the customer either takes the product from the supplier or pays the supplier a penalty.
Strandline (ASX:STA) said its rutile, zircon-monazite, and ilmenite production is expected to generate about 10 per cent, 62 per cent, and 28 per cent of revenues over the life of the mine.
“Having all products covered by binding contracts for the entire life of mine provides a strong endorsement of the Fungoni project and the high quality of zircon and titanium minerals to be produced,” Strandline boss Luke Graham said.
“With the mining licence already received for the project, Strandline is now advancing project funding and finalising negotiations for key contracts necessary to execute the project.”
Fellow mineral sand hopefuls are also squaring away supply contracts ahead of first production.
In late September, Image Resources (ASX:IMA) signed its second off-take agreement for production from its Boonanarring mineral sands projectin Western Australia.
And Sheffield Resources’ (ASX:SFX) boss Mr McFadzean told Stockhead at the annual Diggers & Dealers mining conference in Kalgoorlie that Sheffield has already locked in binding supply agreements for all of its zircon and is in the process of squaring away deals for its ilmenite.
“So 77 per cent of our gross revenue for the first five years is now locked away in binding contracts,” Mr McFadzean said.