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Avanti Mining Inc. (TSXV:AVT) entered into an offtake agreement with ThyssenKrupp Metallurgical Products GMBH for 50% of its total molybdenum production from Kitsault for the life of that mine, representing approximately US$2.7 billion of potential molybdenum revenues.
As quoted in the press release:
The Agreement represents approximately US$2.7 billion of potential molybdenum revenues at the price assumptions reported by Avanti in its February, 2013 NI 43-101 Feasibility Study Update. (See news release of February 6, 2013). TKMetPro also has first right of refusal for any additional molybdenum production developed by the Company on other projects during the term of this Agreement. Avanti has appointed TKMetpro as its exclusive agent for sale of its products in Europe and North America with a specified amount to be sold in Germany. The quantity of molybdenum sold and consumed inside Germany is sufficient to qualify Avanti for German government “Untied Loan Guarantee” (UFK), under the Raw Material Import Policy. Avanti has previously received UFK approval in principle, and has now applied for formal approval based upon this Agreement through KfW IPEX-Bank GmbH (“KfW”) who is acting as Avanti’s UFK agent. KfW and UniCredit Bank AG (“UniCredit”) have previously been mandated to collectively provide, under the UFK program, US$300 million of the total project finance facility needed for the development of the Kitsault mine.
Avanti Mining Inc. Chief Financial Officer, A.J. Ali, said:
We are very pleased to have TKMetPro as a significant customer and look forward to a long term mutually beneficial relationship with them. The TKMetPro agreement is an important step in securing Kitsault’s financing through the UFK program. We look forward to concluding our discussions with potential Asian partners for a similar transaction in order to assist in the completion of the debt financing for the project.
Click here to read the Avanti Mining Inc. (TSXV:AVT) press release