- Perpetual Resources (PEC) has signed a memorandum of understanding (MOU) with Shandong Yaoguo Solar Science & Technology
- The deal will see Yaoguo potentially buy 250,000 tonnes of high-grade silica sand every year from Perpetual’s Beharra Silica Sands Project in WA
- Yaoguo is a China-based buyer of high-grade silica sand to be used for manufacturing glass and glass products in China
- The companies are negotiating product pricing and payment structure terms to enter a binding offtake agreement by no later than June 30, 2021
- Both parties are also exploring the potential for a number of broader offtake and arrangements to distribute silica sand from Beharra throughout China
- Company shares are trading 11.1 per cent higher for 5 cents
Perpetual Resources (PEC) has signed a memorandum of understanding (MOU) with Shandong Yaoguo Solar Science & Technology.
Under the MOU, Yaoguo may purchase 250,000 tonnes of high-grade silica sand every year from Perpetual’s Beharra Silica Sands Project in Western Australia.
Yaoguo is based in Shandong, China and is a significant purchaser of high-grade silica sand for use in the manufacture of high-quality glass and specialist glass products in China. It has a specific focus on high-end solar tubes and heating systems.
The China-based company would purchase the silica sand for its own use as well as sell the product, on behalf of Perpetual, to silica sand users in China.
Specifically, the deal contemplates the purchase of 250,000 tonnes per annum of high-grade silica sand from the Beharra Project. It will also see the parties agree on the pricing and payment structure terms for a binding offtake agreement by no later than June 30, 2021.
“We are proud to have concluded this initial MOU with Yaoguo, which is a successful Chinese end-user of high-quality silica sand that they utilise in the manufacture of their high-end glass products and solar tubes,” PEC Managing Director Robert Benussi said.
Perpetual expects the MOU will lead to an expanded relationship with Yaoguo, with both parties now exploring the potential for multiple, broader offtake and
distribution arrangements for Perpetual’s silica sand products into China.
The ASX-lister and Yaoguo are currently negotiating product pricing and payment terms for the agreement. Definitive pricing is subject to the outcome of Perpetual’s current metallurgical work program as part of its Beharra pre-feasibility study.
Results from the metallurgical work program are expected in the next few weeks, with end product samples due in November.
Company shares are trading 11.1 per cent higher for 5 cents at 12:46 pm AEDT.