The offtake agreement covers a minimum 2 000 t/y, or 4.4-million pounds a year, of vanadium pentoxide on a take-or-pay basis over an initial three-year term, accounting for some 16% of Gabanintha’s forecast annual production. CNMC will also have the option to extend the offtake agreement by a further three years.
The sales agreement is expected to generate some A$50-million in annual revenue, or A$300-million, over the full offtake term, based on the current vanadium prices.
“We are very pleased to have executed our first binding offtake agreement with CNMC and look forward to a long, mutually beneficial partnership,” said Technology Metals Australia MD Ian Prentice.
“The collaborative and cooperative approach of the negotiations bodes very well for the companies’ future relationship. This agreement is a key milestone for progressing the development of Gabanintha, including engineering, procurement and construction and financing discussions, and underscores the importance of delivering a very high quality definitive feasibility study (DFS) and a very high purity vanadium pentoxide product.”
A DFS into Gabanintha found that the project could produce 27.9-million pounds a year of vanadium pentoxide over a mine life of 16 years. The study estimated that the project would cost $318-million to develop, and would deliver mine-life earnings before interest, taxes, depreciation and amortization of A$4.1-billion and an estimated free cash flow of A$1.09-billion.
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