Victory Metals snags Sumitomo offtake deal for North Stanmore

Sumitomo to potentially take 30% of North Stanmore REE annually for 5 years
Deal highlights project’s potential as world-class rare earths supplier
Parties aiming to enter into a binding term sheet by 31 October 2025

Special Report: Victory Metals has signed a memorandum of understanding with Sumitomo for 30% of annual production of mixed rare earth carbonate from the North Stanmore heavy rare earth project for an initial five-year term.

The WA project already boasts a substantial 235Mt resource, including 79,200t of total rare earth oxides and 28,000t of heavy rare earth oxides, which is regarded by experts at the Geological Survey of WA as a world-class ionic clay-hosted heavy rare earths and scandium discovery.

Last month the company expanded the range of mineralisation to more than 13.5km of strike, reporting assays of prized heavy rare earths including dysprosium and terbium, which are used in magnets and virtually solely produced in China and neighbouring Myanmar.

And there’s room to grow the resource, with an updated estimate on the cards near-term and a scoping study slated for Q1 2025.

The project’s potential has clearly caught the eye of Fortune Global 500 company Sumitomo – one of the world’s leading integrated trading and investment enterprises.

Victory Metals (ASX:VTM) says the agreement demonstrates Sumitomo’s confidence in the quality, scalability, and sustainability of the project, setting the stage for future investment, project development support and technological collaboration.

Future supplier of critical rare earths

The MOU establishes a potential long-term offtake partnership between the two companies, which the company says reinforces its global positioning as a future supplier of ethically sourced critical rare earth materials for the technology, defence, and renewable energy sectors.

“We are extremely pleased to be partnering with Sumitomo Corporation, a globally recognised powerhouse with extensive industry expertise and a proven track record of securing critical mineral supplies,” CEO and executive director Brendan Clark said.

“This agreement reflects the strategic value of the North Stanmore Project and confirms the global significance of our unique heavy rare earth element composition within the North Stanmore clay deposit.

“The agreed terms enable Victory to accelerate project development, enhance financing options, and expand future processing capabilities.

“This partnership opens exciting new opportunities for Victory to integrate into the global rare earth supply chain and secure our place as a leading supplier in the energy transition and defence sectors.”

A step on the path to development

The parties are aiming to enter into a binding term sheet by October 31, 2025, with the pricing indexed to the prevailing market prices for mixed rare earth carbonate product (and rare earth oxide product, if applicable), and adjusted for TREO content.

“Victory looks forward to working with Sumitomo and both parties have agreed in good faith to enter into a binding off-take agreement,” Clark said.

“Sumitomo’s financial strength, global logistics expertise, and commitment to sustainable growth make it the ideal long-term partner for Victory Metals as we continue to progress our North Stanmore project towards development.”

Sumitomo is planning to trade the product from Victory internationally, building on a cavalcade of inroads it has made into the Aussie critical minerals scene this year.

Giving a sense of the significance of the MoU, SMM’s previous investments in WA mining in 2024 have included a $615m deal to buy a 30% stake in Rio Tinto’s (ASX:RIO) giant Winu copper and gold development and a joint deal with Mitsubishi to complete a $98.5m DFS on Ardea Resources’ (ASX:ARL) Goongarrie nickel project.

“We plan to utilise our global network to sell the rare earths produced by Victory. We look forward to future partnerships,” Sumitomo said of the VTM MoU.

This article was developed in collaboration with Victory Metals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.