Western Australian mineral sands developer Image Resources NL (ASX: IMA) has secured a sales agreement from its off-take partners for 100,000 tonnes of HMC from current inventory at its high-grade, zircon-rich Boonanarring Mineral Sands Project located 80km north of Perth.
This sales agreement is with off-take partner Shantou Natfort Zirconium and Titanium Co., Ltd and Guangdong Orient Zirconic Ind Sci & Tech Co., Ltd, (OZC), to take delivery of the 100kt of heavy mineral concentrate (HMC) across a 3 to 5 month period starting in July 2020. Deliveries will be in multiple shipments of 20 to 30k tonnes each, and secured by letters of credit.
Pricing is based on current market prices and will be locked for the full 100,000 tonnes to protect against any unanticipated softening of the market during the delivery period.
Image Managing Director and CEO, Patrick Mutz, said that in addition to this sale to Natfort and OZC, Image is proactively seeking to diversify its sales base through the sale of HMC to interested buyers outside of the existing off-take agreements.
Discussions are ongoing with several other potential buyers and the Company is confident the combination of sales to Natfort and OZC under the above sales agreement, and potential sales to others will serve to monetise Image’s current surplus HMC inventory across the next 3-4 months, and maintain more timely sales of ongoing production.
Managing Director and CEO Patrick Mutz stated,
Once again our off-take partners have demonstrated their commitment to acquiring Image’s HMC by stepping up to purchase Image’s surplus inventory even under the current uncertain economic conditions,” Mr Mutz said.
“This is a great example of the benefits of a positive working relationship. We welcome the support, however we also look forward to expanding our sales network beyond our current off-take agreements, including, if achievable, broadening our customer base geographically.”
Natfort has been the primary off-taker of Image’s HMC since the initial sale of product from production at Boonanarring in January 2019.
While COVID-19 has had a global affect on the demand for HMC, zircon and ilmenite, production at Boonanarring was largely unaffected by the restrictions and Image’s HMC inventory increased to record levels of over 100kt at the end of May 2020.
Mr Mutz said this 100kt sales agreement from Natfort and OZC will address the delay in sales in 1H 2020 and provide greater certainty for Image to meet its CY2020 sales guidance.
