Hong Kong-listed Burwill Commodity announced in a regulatory filing on Thursday that it has entered into offtake agreements with Alliance Mineral Assets, Lithco No. 2, and Tawana Resources.
Burwill will advance by instalments A$25 million ($26.3 million) for exclusive selling rights to the lithium concentrate flowing from the Bald Hill Project in Western Australia for a five-year term, and pre-emptive rights for subsequent five years.
Burwill has made an initial advance payment of A$7.5 million upon signing of the agreement, and will make two further advance payments of A$8.75 million each in July and Sept 2017.
The advance payment is a non-interest bearing advance from Burwill to the sellers, which will be repaid in full within the first two years of the five year term, by way of set-off against the purchase price for each delivery of the lithium concentrate.
In the first two years starting Feb 2018, Burwill will purchase at least 200,000 dry metric tonnes of high-grade lithium concentrate at a fixed price, worth approximately US$200 million ($279.5 million).
Lithium concentrate is raw material for lithium carbonate processing. Lithium carbonate is widely used in mobile phones, digital products, military, as well as industrial and large capacity domestic energy storage systems.
Alliance Mineral Assets is the registered holder and beneficial owner of the Bald Hill Lithium Mine Project, and has formed a joint venture with Lithco.
Separately, the SGX-listed Alliance Mineral Assets requested for a trading halt after market close on Thursday "pending for release of an announcement".Shares of Alliance Mineral Assets last closed at 31.5 cents.
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