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- Sovereign Metals (SVM) signs an offtake agreement with Hascor International Group for rutile from its Kasiya project in Malawi
- Hascor is a multinational ferroalloy and metal powder supplier and is also a key processor and global distributor of natural rutile products for the welding industry
- Through a memorandum of understanding, SVM will supply 25,000 tonnes of natural rutile per year to Hascor’s processing plants and clients across five continents
- Subject to negotiations, the initial five-year agreement is set to come in to effect once nameplate production begins
- Shares are trading 11.1 per cent higher at 45 cents at market close
Sovereign Metals (SVM) has signed an offtake agreement with Hascor International Group for rutile from its Kasiya project in Malawi.
As outlined in a memorandum of understanding (MoU), Sovereign will supply 25,000 tonnes of natural rutile per year from the project to Hascor’s processing plants and clients across five continents.
Hascor is a multinational ferroalloy and metal powder supplier and is also a key processor and global distributor of natural rutile products for the welding industry.
The initial five-year agreement is set to come in to effect once nameplate production begins at the project.
The deal follows the company’s release of an initial scoping study in December, which confirmed Kasiya as a “globally significant” natural rutile project.
It is the largest undeveloped rutile deposit in the world and according to Sovereign is highly strategic in a market characterised by extreme supply deficit.
The initial scoping study developed the concept for a multi-decade mine providing a stable supply of rutile and graphite, whilst contributing to the economy of Malawi.
Through the new partnership, Hascor is also set to provide Sovereign with strategic advice on marketing and product development.
Sovereign notes volumes may be varied up or down by mutual agreement and pricing will
be based on market prices to the welding sector subject to agreed price variations through the supply term.
With demand for natural rutile strengthening along with prices, the company said this maiden MoU is part of its marketing strategy.
Sovereign’s Managing Director Dr Julian Stephens said the company is very excited to sign the deal with a major rutile supplier like Hascor.
“Hascor is a market leader in natural rutile product development and distribution for the welding industry across five continents,” he said.
“The offtake MoU with Hascor points to the quality and strategic nature of our world class Kasiya Rutile Project.”
The agreement is non-exclusive and non-binding and remains subject to negotiation and execution of a definitive agreement. It is set to expire on December 23 if a deal is not reached, however, it can be extended if both parties agree to do so.
Shares were trading 11.1 per cent higher at 45 cents at market close.
