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- Hastings Technology Metals (ASX:HAS) inks an offtake deal with a Mongolian-based Chinese downstream processor
- REE concentrate from its Yangibana project will be toll-treated and broken down into further rare earths
- Hastings sees a “significant” revenue increase in return
- Shares last traded at 62 cents
Hastings Technology Metals (ASX:HAS) has inked an REE offtake deal with Baotou Sky Rock for the downstream processing of REEs.
Baotou is the capital of Mongolia.
The company will send off REE concentrate from its Yangibana project to be toll-treated in China.
Hastings will receive payments from BSR “less a capped multi-stage toll treatment fee”, which the company believes will “significantly” boost revenues.
The deal runs for seven years and assumes delivery of 10,000tpa of concentrate.
Multiple offtake agreements
BSR’s offtake agreement isn’t the only one within Hastings’ larger business ecosystem – it’s the beneficiary of another with Thyssenkrupp Materials Trading (TMT) which covers two-thirds of Yangibana production.
Hastings continues to negotiate with other third parties with a view towards inking a third.
The new deal with BSR, Hastings announced, has formed part of a new funding conversation around Yangibana, which is now in “advanced stage[s]”.
All in all: Hastings sees a 61 per cent increase in post-tax net present value to $865 million.
Life of mine cash flow is estimated to hit more than $3 billion.
Management comment
“The agreement with BSR will facilitate Hastings extracting greater value from our concentrate,” HAS CEO Paul Brown said.
“We have identified the opportunity to utilise excess downstream REE capacity by partnering.
“The ability to secure this demonstrates strong demand for Yangibana’s NdPr-rich concentrates.”
Shares last traded at 62 cents.
