- Image Resources (IMA) has secured a sales agreement for 100,000 tonnes of heavy mineral concentrate (HMC) from its Boonanarring Minerals Sands Project
- The wholly-owned Boonanarring project is located 80 kilometres north of Perth in WA
- It's arguably one of the highest-grade, zircon-rich, mineral sands projects in Australia
- Under the agreement, the company will sell HMC to its current offtake partner, Natfort, and another company, commonly known as OZC
- Despite the weakened demand for HMC during the peak of COVID-19, Natfort purchased 30,000 tonnes of Image's product
- Outside of these agreements, Image is focused on diversifying its sale base to other interested buyers
- Company shares are up 9.38 per cent and trading for 17.5 cents each
Image Resources (IMA) has secured a sales agreement for 100,000 tonnes of heavy mineral concentrate (HMC) from its Boonanarring Minerals Sands Project.
The sales agreement is with offtake partner Shantou Natfort Zirconium and Titanium (Natfort), as well as Guangdong Orient Zirconic Ind Sci & Tech Co (OZC).
100,000 tonnes of HMC will be delivered across a three-to-five-month period, starting this month. Deliveries will be made in multiple shipments of between 20,000 and 30,000 tonnes each.
Pricing is based on current market prices and will be fixed for the entire 100,000 tonnes to avoid unexpected softening of prices.
Natfort has been the main offtaker of Image's HMC since the initial sale of HMC product from Boonanarring in January 2019.
Due to COVID-19, the demand for HMC, zircon and ilmenite weakened in the first half of this year. Production at Boonanarring was largely unaffected, which led to Image having a significant inventory at the end of May.
Despite a softened demand, Image sold a total of 30,000 tonnes of HMC across two shipments to Natfort and payment for the second shipment will be received sometime this month.
The sales agreement is expected to address the delay in sales and provide greater certainty for the company to meet its sales guidance for the 2020 calendar year.
"Once again, our offtake partners have demonstrated their commitment to acquiring Image’s HMC by stepping up to purchase Image's surplus inventory even under the current uncertain economic conditions," Managing Director and CEO Patrick Mutz said.
"We welcome the support, however, we also look forward to expanding our sales network beyond our current off-take agreements, including, if achievable, broadening our customer base geographically," Patrick added.
Image is also focused on diversifying its sales base for HMC outside of its existing offtake agreements.
Discussions are continuing with several other potential buyers. Meanwhile, Image is confident the sales to Natfort and OZC, as well as potential sales to others, will monetise its current surplus of inventory over the next three to four months.
The Boonanarring Mineral Sands Project is located 80 kilometres north of Perth, Western Australia. It is arguably one of the highest-grade, zircon-rich, mineral sands projects in Australia.
Company shares are up 9.38 per cent and trading for 17.5 cents each at 3:30 pm AEST.