MGC signs $60m offtake deal

MGC Global, which is currently the takeover target of Perth-based Erin Resources, has signed a $60 million agreement to sell its cosmetic cannabis product to a European cosmetic production company.

Under the terms of the deal, MGC will supply Natura Laboratories with a minimum of 300 kilograms of cannabidoil resin extract per year for a minimum of four years, with a minimum 60 per cent purity.

Natura uses the product to produce a number of cosmetic products including skin, facial and eye creams, hair care and oils.

“In addition, MGC will shortly commence its initial work programs with Natura to develop the formulas for use in the cosmetics, food supplements and medical devices in development under a joint venture with Natura,” Erin said in a statement.

Israel-based MGC and Natura entered into the joint venture agreement earlier this week.

Erin executive director Brett Mitchell said the offtake agreement was a significant commercial milestone for MGC.

“In conjunction with the license approvals in Slovenia we’re confident that MGC is on track to meet its initial stated goals both financially and operationally,” Mr Mitchell said.

In May, Erin announced plans to buy MGC, which specialises in medical and cosmetic cannabis, for a cash and share package worth about $1.7 million.

Erin shares were 21 per cent higher at 2.3 cents at 11:15am.