Force Commodities Locks Down Lead-Silver Offtake for Tshimpala

Force Commodities (ASX:4CE) has entered a binding offtake agreement for all high-grade lead and silver ore produced at the Tshimpala project in the Republic of Malawi.

The deal, held with Swiss global commodities trading group Transamine Trading, gives Transamine the right to purchase the aforementioned products from Tshimpala on an “evergreen” basis. It is unknown at this time how long the agreement is set to last, though Force refers to it as a “multi-year contract.”

Pricing for lead in the offtake agreement will be based on London Metal Exchange (LME) benchmark pricing, while silver will use London Bullion Market Association pricing.

“This offtake agreement has been executed within 10 days of the company completing its acquisition of the Tshimpala project and represents a significant vote of confidence and validation of that transaction,” Force Managing Director Jason Brewer said in a statement.

Earlier this month, Force acquired a 51 percent majority stake in Tshimpala and secured its status as the manager and operator of the project. The asset consists of one mining license and three granted exploration licenses, which extend over 1,414 square kilometers.

Trial mining completed at three of the project’s prospects in late 2018 resulted in a bulk sample of over 100 tonnes, which was later assayed and shown to have an average grade of 60.48 percent lead and 735 grams per tonne silver.

Alongside the newly inked offtake agreement, Force announced that it is finalizing arrangements with a global logistics company for transportation and logistics support for material from Tshimpala.

A transportation study for Tshimpala lays out two options: exporting through Mozambique’s Port of Nacala by using an existing rail network, or through the Port of Beira using existing road infrastructure. Both options entail an all-in cost of up to US$125 per tonne of material transported.

Force Commodities’ share price jumped 13.64 percent on Wednesday (July 17) following the announcement, ending the day of trading on the ASX at AU$0.025.

As of Tuesday (July 16), lead was trading at US$1,976.50 per tonne on the LME.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.