18/04/2017 - 12:10

MZI builds on offtake agreement

18/04/2017 - 12:10

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Shares in mineral sands miner MZI Resources were higher on news one of the company’s existing offtake partners had agreed to take additional leucoxene product from its Keysbrook mine near Serpentine.

Mining work at MZI Resources' Keysbrook operation near Serpentine.

Shares in mineral sands miner MZI Resources were higher on news one of the company’s existing offtake partners had agreed to take additional leucoxene product from its Keysbrook mine near Serpentine.

MZI said today it had signed a letter of agreement with the customer for an additional 50,000 tonnes of the premium L88 product over the next three years.

That’s on top of the customer’s existing annual commitment of 25,000t of L88.

MZI's only L88 offtake customer is US-based Chemours; a company spun-out of DuPont Titanium Technologies in 2015.

The original offtake agreement for 25,000tpa of L88 over an initial five-year term was signed between MZI and DuPont in late 2014.

Investors welcomed the offtake deal, with MZI shares rising by 6.9 per cent, or 1.5 cents, to 23 cents each at midday.

MZI said today that a substantial amount of its planned L88 production for the next three years at Keysbrook was now fully committed.

“The company remains in active discussions with other prospective leucoxene customers with regard to future uncommitted production,” it said.

“All of MZI’s planned L70 and zircon concentrate production is already committed for the next four years under existing offtake agreements.”

MZI interim managing director Stephen Ward said the signing of an expanded offtake agreement was a strong vote of confidence in the company’s relationship with the customer and Keysbrook as a reliable long-term supplier of premium quality mineral sands products.

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