General Mining Corporation and Galaxy Resources have signed binding spodumene concentrate agreements with two major Chinese buyers for offtake from the Mt Cattlin Lithium Project in Western Australia.
The agreements include the forward sale of 60,000 tonnes of spodumene concentrate for US$600 per tonne to the two China-based buyers. Of the US$36 million sale, US$18 million will be paid as a pre-payment, with funds due to be received on or before March 31, 2016. The maiden shipment is expected in July or August this year.
Total expected minimum 2016 production from Mt Cattlin is 65,000 tonnes and further negotiations well under way for the sale of the remaining tonnes.
The Mt Cattlin partners have also agreed to deliver 120,000 tonnes in 2017 to the same Chinese customers with a sale price to be agreed during quarter four of 2016, based upon prevailing market conditions at that time.
General and Galaxy are selling the 60,000 tonnes of production into the lithium carbonate and lithium hydroxide refining markets. It is intended that for the balance of 2016 and for 2017, production will be sold to a range of downstream converters, including the lithium carbonate and lithium hydroxide refining markets, and the cathode market.
General Mining’s executive chairman Michael Fotios said, “These sales represent a tremendous step forward for the Mt Cattlin operation, and validate the work General Mining has done to re-optimise the process flow sheet.
"The company is very pleased that it has been rewarded for a careful and prudent approach to agreeing its maiden concentrate sales, and we look forward to long and successful relationships with our new customers.
"Beyond these initial sales, forecast demand for our key product looks very robust in the short to medium term and General, who will be the world’s largest independent supplier (not owned or controlled by a downstream converter) of spodumene concentrate in 2016, is well positioned to help meet demand from the lithium carbonate and lithium hydroxide refining markets, and the cathode market.”
The availability of spodumene concentrate remains very tight in China, as well as the general supply of lithium products overall in the market. In light of the significant prices increases that have been reported in the last quarter of 2015, General and Galaxy will continue to review the marketing and pricing strategy of the future spodumene product from Mt Cattlin as the project continues to advance to a restart of production.
Commissioning of the refurbished Mt Cattlin plant is on track to commence by March 31 with the fine circuit first, followed by the coarse circuit, including crusher, during the June quarter.