The non-binding MOU sets the stage for the company to supply Wilson International Trading with 350,000 tonnes of phosphate products a year.
According to the company, Wilson International Trading has agreed to potentially purchase 350,000 tonnes per year of phosphate rock concentrate or other phosphate products produced at Ammaroo.
Wilson is looking to secure 1 million tonnes per year of phosphate rock for Greenstar Ferilizers, a leading Indian fertilizer manufacturer. The non-binding MOU will allow Verdant and Wilson to conduct negotiations regarding supply from Ammaroo in good faith.
“The establishment of an offtake MOU for supply to a significant Indian fertiliser manufacturer, Greenstar Fertilisers[,] through their procurement partner, is an important step in the process of establishing firm markets for Ammaroo phosphate rock,” said Chris Tziolis, managing director at Verdant.
He added, “[i]n conjunction with ongoing work to definitively establish the project’s economic feasibility and to obtain a license to operate, product analysis and discussions also continue with a number of other buyers of phosphate rock in the Asia Pacific region.”
Verdant intends to work toward offtake MOUs and binding agreements with those other potential buyers.
The company’s Ammaroo project is located in Australia’s Northern Territory, and contains the billion-tonne, 40-kilometer-long Ammaroo phosphate JORC resource, as well as the satellite Ammaroo South JORC resource and the Rockhole phosphate prospect.
A bankable feasibility study (BFS) and environmental impact assessment (EIS) are currently in the works for Ammaroo, following the completion of a draft EIS last October. In its latest quarterly report, Verdant said the BFS remains on track for completion in Q1 2018.
As of Monday at 1:10 p.m. EST, Verdant’s share price was sitting at AU$0.028. The company is down 17.14 percent year-to-date.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.