KGL Resources Ltd has entered into a binding sales agreement with Glencore International AG for the sale of 100% of the copper concentrate produced from KGL’s high-grade Jervois Copper Project. It has a minimum term expiring at the end of five full calendar years after commercial production is reached. The sale agreement is evergreen, and will continue beyond the minimum term until either party terminates it by giving two years prior notice.
The sale price for the copper concentrate is volume based and calculated by reference to the LME cash settlement price for copper, with silver and gold credits (subject to minimum ‘payable’ limits) and adjustments for penalties, treatment and refining charges and a freight credit. The agreement is subject ro other customary terms and conditions, including processes for assaying, weighing, sampling and moisture determination in relation to the concentrate, and contains relevant force majeure clauses.
The current schedule to be confirmed as part of the feasibility, and final investment decision has the project in the development phase this year. However, this sale contract is conditional upon finance being secured by no later than 30 September 2025, or commercial production by no later than 31 December 2025.
Simon Finnis, KGL Managing Director, said: “The execution of the binding offtake agreement with Glencore is a major milestone for KGL and the Jervois Project. It brings certainty to the sales programme, and Glencore is a well-credentialed and bankable counterparty. Having benchmarked pricing in this strong commodity environment is comforting. This agreement is a key component of KGL’s plans to procure funding for the development of Jervois.
Work is now continuing on the feasibility study, which will incorporate the terms of this agreement, as well as the new resource data from Bellbird, Reward and Rockface deposits. We expect this will result in favourable annual production and mine life outcomes.
“It is also very satisfying to us to be selling our material within Australia, which obviously assists with the Australian economy, supports the local area, and de-risks our project by eliminating the need for rail and ocean freight transportation of our finished product. We should also not discount the benefits this brings to our environment by minimising transportation, and therefore emissions.”
Read the article online at: https://www.globalminingreview.com/finance-business/24032022/kgl-resources-signs-offtake-agreement-with-glencore/
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