21/01/2011 - 12:33

Atlantic announces China vanadium deal

21/01/2011 - 12:33

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Diversified minerals explorer Atlantic has struck an agreement with a Chinese-backed manufacturing group and a Hong Kong-based commodities trading firm for the sale of 100 per cent of production from its Windimurra vanadium mine.

Atlantic announces China vanadium deal

Diversified minerals explorer Atlantic has struck an agreement with a Chinese-backed manufacturing group and a Hong Kong-based commodities trading firm for the sale of 100 per cent of production from its Windimurra vanadium mine.

Perth-based Atlantic announced today its wholly owned subsidiary, Midwest Vanadium, had signed a five-year deal with Chinese state-owned mining group Wenfu, subject to an agreed minimum and maximum sales price, or collar mechanism.

Hong Kong-based raw materials trader Element Commodities will market the vanadium.

Atlantic told the ASX today the pre-agreed minimum sales price was higher than Midwest Vanadium's expected long-term cost of production.

"This agreement represents an exceptional price protection and marketing solution for Windimurra," Atlantic managing director Mr Minosora said.

"The collar price mechanism exemplifies the innovative approach we are taking to maximise the value of Windimurra."

"This sales and marketing agreement secures a strong customer for all of Windimurra's ferrovanadium production and underwrites the long-term viability of the project, thereby enhancing its financial attractiveness."

Production at Windimurra is expected to commence production in the third quarter this year, with a capacity of 5,700 tonnes per year.

Meanwhile, Atlantic also announced today that mining contractor Minepower had been appointed to complete civil works on the WIndimurra project.

The Windimurra project is aroudn 85 per cent complete.

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