BEIJING (Asian Metal) 27 Apr 20 – Australian-based Technology Metals Australia Limited (“TMT”) today announced the execution of a binding vanadium pentoxide offtake agreement with CNMC (Ningxia) Orient Group Company Ltd. (“CNMNC”) over vanadium production from its wholly owned globally significant, long life, low cost, large scale Gabanintha Vanadium Project.
The binding vanadium pentoxide offtake agreement between TMT’s wholly owned subsidiary The Kop Ventures Pty Ltd. (as Seller), TMT (as guarantor of the obligations of the Seller) and CNMNC (as Buyer) includes:
(1) Minimum annual quantity of V2O5 to be purchased of 2,000tpa (+/- 10% at the Seller’s election) on a take-or-pay basis (or such quantity of product that is available, up to 2,000tpa, during the ramp-up and commissioning phase),
(2) CNMNC has the option to request an additional quantity of V2O5 post the satisfaction of the conditions precedent, with the terms of any additional supply to be separately agreed,
(3) A right for TMT to temporarily suspend deliveries in the event of a sustained downturn in V2O5 price, with the parties to negotiate amendments to the agreement in good faith to lift the temporary suspension,
(4) A three year term from commencement of production, with an option to extend for a further three years, with the annual quantity and pricing to apply during any extension period to be reviewed on an annual basis and adjusted if agreed by the parties,
(5) Conditions precedent relating to receipt of approvals, grant of tenure, project funding and TMT Board decision to proceed, to be either satisfied or waived by TMT by 30 June 2021,
(6) A right for CNMNC to terminate the agreement if the first delivery of V2O5 is not made on or before 31 March 2023,
(7) A right for TMT to terminate the agreement if negotiations to lift a temporary suspension are not successful.
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