Kaboko signs offtake with Sinosteel

THE BOURSE WHISPERER: Zambia-focused manganese play Kaboko Mining has signed a strategic offtake agreement with Sinosteel Australia for exports of high quality, high grade lump manganese ore to China.

 Sinosteel Australia is a subsidiary of Chinese conglomerate Sinosteel Corporation, one of China’s largest State-owned enterprises.

Under the terms of the binding off-take agreement with Sinosteel, Kaboko has agreed to sell an initial 180,000 tonnes of a minimum 48 per cent manganese ore to Sinosteel on an exclusive basis from the Company’s Zambian manganese projects.

Pricing will be based on BHP Billiton’s reference price (expressed in US$ per dry metric ton unit manganese content), CIF China basis.

Kaboko has forecast the first exports under the offtake agreement to commence later this year.

The agreement follows successful testing by Sinosteel of a trial shipment of approximately 210 tonnes of manganese ore Kaboko shipped to Xinagang in China, which confirmed the high grade and quality of the ore.

 

Kaboko bagged manganese ore. Source: Company quarterly report.

 

“The signing of our first off-take agreement with such a well-known and significant end user is a key milestone for the company and will significantly underpin our mining and development plans and our debt funding arrangements that we are progressing,” Kaboko Mining executive director Jason Brewer said in the company’s announcement to the Australian Securities Exchange.

Kaboko has earmarked production from its Emmanuel and Peco projects in Zambia to be the primary source of product for the offtake agreement.

The company is currently undertaking resource definition drilling at these projects with further exploration work ongoing.

Detailed mine optimisation studies at the Emmanuel project continues with additional new mining and beneficiation equipment ordered.