GMM announces second definitive agreement with Mitsubishi Corp. and Chinese offtake customer

Image credit: Galaxy Resources website

General Mining (GMM) and its Mt Cattlin joint venture partner Galaxy Resources have announced the signing of a second definite offtake agreement with Mitsubishi Corporation and another Chinese offtake customer.

Image credit: Galaxy Resources website
Image credit: Galaxy Resources website

Late last year, the project partners signed a sales and distribution agreement with Mitsubishi under which Japan’s largest trading company became the principle buyer of the spodumene concentrate produced from the mine.

“ON 8 March 2016, Galaxy and GMM announced the signing of term sheets with Offtake Customers in China for the sale of 60,000t of lithium concentrate at US$600/mt for 2016, and a volume commitment of 120,000t in 2017 with initial pricing for 2017 to be confirmed in Q4 of 2016,” GMM told the ASX.

“The JV has now entered into definitive contracts for 45,000 tonnes for 2016, received 50% of the contract value as prepayments equal to US$13.5 million, and contracted a total of 120,000t of 2017 production, subject only to final pricing during Q4 2016.”

In addition, in light of the continued robustness in lithium carbonate pricing since the original offtakes were negotiated, the JV partners decided to retain 15,000 tonnes of 2016s forecast production for a potential spot or auction  sale process later this year.

General Mining also told the ASX that it has now paid its first A$1.5 million quarterly installment of the A$6 million per annum progress payment due on the Mt Cattlin Project, in accordance with the Acquisition and Development Agreement entered into with Galaxy.