Technology Metals Australia Limited (ASX: TMT) (“Technology Metals”or the “Company”) is pleased to provide this update in regard to activities in support of the progression of development of the high grade, low cost, large scale, long life Gabanintha Vanadium Project (“Project” or “GVP”).
Following the delivery of the very high quality DFS on the development of the globally significant GVP in August 2019 the Company has been in ongoing discussions with offtake partners, equipment vendors and suppliers, strategic partners and project funding parties as well progressing Project environmental and permitting activities.
These activities have delivered offtake MOU’s with two counterparties covering 40% of the proposed annual average GVP production; 2,000Tpa V2O5 with CNMC (Ningxia) Orient Group Co., Ltd. (“CNMNC”) and 3,000Tpa V2O5 with Shaanxi Fengyuan Vanadium Technology Development Co., Ltd. (“Fengyuan”), and progressed discussions relating to financial support of the Project with the Northern Australia Infrastructure Facility (“NAIF”) to the Due Diligence Stage of the NAIF assessment process.
As previously disclosed the offtake MOU between the Company and CNMNC has been extended to enable the orderly progression through to a binding offtake Agreement. Discussions regarding the conversion of the offtake MOU to a binding Offtake Agreement are now in the latter stages of negotiation and documentation, with investors to be updated as this matter is progressed.
Fengyuan are undertaking due diligence on TMT and the GVP in conjunction with reviewing an initial draft offtake agreement. The due diligence process is expected to include a GVP site visit, which is likely to take place in the New Year. As such TMT has proposed to maintain the MOU in full effect until the end of March 2020 to enable the orderly completion of the mutual due diligence process.
Managing Director Ian Prentice commented; “We are very pleased with progress made in advancing the development of GVP following the delivery of the very high quality DFS in August 2019, in what has been a challenging vanadium market. We believe that the tightness in the vanadium supply – demand balance is starting to have an impact, which should see a recovery in the V2O5 price leading in to 2020. This timing is very complimentary for the development of the globally significant large scale, low cost, long life GVP and as we conclude negotiations towards binding offtake agreements”.
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