- Vital Metals (VML) amends its offtake deal to increase the volume of rare earth oxide (REO) product it sells to Norway-based REEtec by 50 per cent
- Vital will sell 750 tonnes of neodymium and praseodymium (NdPr) per year over five years from its Nechalacho mine in Canada
- The amendment also extends the product sales to 2028 with the option for an additional 10-year supply agreement
- VML believes this is a vote of confidence in its ability to provide feedstock to REEtec, which will use the product as principal feedstock for its rare earth separation facility
- Company shares are up 6.90 per cent to trade at 6.2 cents at 12:18 pm AEDT
Vital Metals (VML) has amended its offtake agreement with Norway-based REEtec to increase the volume of product sold.
The companies initially signed the offtake deal in December 2020 which outlined Vital selling 1000 tonnes of rare earth oxide (REO) product per annum from its Nechalacho mine in Canada. They then sealed the deal with a definitive offtake and profit-sharing agreement in February this year.
Under the amendment, Vital will sell REEtec 50 per cent more REO product containing at least 750 tonnes of neodymium and praseodymium (NdPr) per annum over five years.
This equates to a total of 3750 tonnes of NdPr contained within around 2000 tonnes of total rare earth oxides (TREO) per annum.
The new deal also extends Vital’s product sales to REEtec to 2028 and provides the option to further expand operations during an additional 10-year supply agreement to provide up to 2500 tonnes of NdPr per annum contained within about 6800 tonnes TREO (containing a maximum 25 per cent cerium).
This represents 75 per cent of Vital’s expanded operation at its Saskatoon rare earths extraction plant and represents a 50 per cent increase in the product to be supplied under the existing Definitive Off-take Agreemen
Vital Metals Managing Director Geoff Atkins is pleased with the updated terms.
“This 50 per cent increase in product to be sold to REEtec represents a vote of confidence in Vital Metals’ ability to guarantee feedstock to the European rare earths supply chain,” he said.
“There’s also potential for a long term supply agreement for an additional 10 years after 2028, which would give us a guaranteed market for our products as we look to extend Nechalacho’s mine life in stage two operations and bring our other projects on-line.”
REEtec plans to use REO product as principal feedstock for its rare earth separation facility, which called for a 50 per cent increase in product volume.
REEtec’s CEO Sigve Sporstøl said the agreement benefited both companies.
“The increased supply of NdPr enables us to further strengthen our position as a supplier of high-quality products based on a sustainable manufacturing process and a transparent supply chain,” Mr Sporstøl said.
Company shares were up 6.90 per cent to trade at 6.2 cents at 12:18 pm AEDT.