- Mineral Commodities (MRC) signs a non-binding offtake and funding agreement with industrial garnet company GMA Group’s subsidiary, Garnet International Resources
- The offtake agreement will form the foundation of expanding the company’s revenue base and profitability at the Tormin Mineral Sands Operation in South Africa
- GMA will provide MRC with a US$10 million (A$14.8 million) loan which will fund the design and construction of a 250 to 300 ktpa garnet and ilmenite mineral separation plant
- GMA has first right of refusal on any finished garnet product produced in excess of the minimum offtake
- MRC ends the day 3.53 per cent in the green to close at 8.8 cents
Mineral Commodities (MRC) has signed a non-binding offtake and funding agreement with industrial garnet company GMA Group’s subsidiary, Garnet International Resources.
The offtake agreement is said to form the foundation of expanding the company’s revenue base and profitability at the Tormin Mineral Sands Operation in South Africa.
It will commence in 2024 and run until 2033, subject to renewal at GMA’s election.
As part of the agreement, MRC will supply Garnet International with finished garnet product in increasing volume from 80 kilotonnes per annum (ktpa) in the 2024-2025 year.
In return, GMA will provide US$10 million (A$14.8 million) in loan funding payable over five years from January 1, 2024.
The loan is on commercial terms to fund the design and construction of a 250 to 300 ktpa garnet and ilmenite mineral separation plant (MSP) in the Western Cape region of South Africa.
The agreement is aligned with the company’s strategic plan to transition into higher value finished products, with construction of the MSP aiming to be completed by the December 2023 quarter.
MRC CEO and Managing Director Jacob Deysel said the offtake agreement will cover most of the available finished garnet produced from current operations.
“The GMA funding agreement also allows construction of an ilmenite MSP, with ilmenite finished product to be sold into the lucrative, well established finished ilmenite market,” he said.
“We welcome the opportunity to renew and formally extend our long-standing relationship with GMA and explore new opportunities to expand our mutually beneficial commercial interests.”
GMA has first right of refusal on any finished garnet product produced in excess of the minimum offtake.
MRC has ended the day 3.53 per cent in the green to close at 8.8 cents.