THE BOURSE WHISPERER: King Island Scheelite (ASX: KIS) announced an Off-take Agreement for tungsten concentrate with Wolfram Bergbau und Hutten AG, a wholly owned subsidiary of Sandvik AB.
King Island Scheelite said the Wolfram Agreement is for the delivery of 140,000 metric tonne units (mtu) or 1,400 tonnes of tungsten oxide, over a four-year period.
The company said this equates to the export of approximately 2,200 tonnes of concentrate, produced by its redeveloped Dolphin mine over that period.
The Wolfram Agreement embodies contractual take or pay principles and is subject to the seller (KIS Group) achieving certain financial and operational milestones leading up to 31 March 2021.
Milestones are commencement of groundworks after placement of orders for longer lead time items, commencement of dry commissioning, and completion of ramp up.
At full production, the redeveloped Dolphin mine is expected to produce approximately 2,000 tonnes of tungsten oxide per annum, contained in 3,100 tonnes of concentrate.
The Wolfram Agreement therefore represents approximately 20 per cent of its annual production.
“It is extremely pleasing to have attracted the internationally renowned Wolfram Group as our first customer, in what is a highly competitive market,” King Island Scheelite chairman Johann Jacobs said in the company’s announcement to the Australian Securities Exchange.
The company indicated negotiations with other international APT producers are at an advanced stage for the balance of the annual production.
APT – Ammonium Paratungstate – is an intermediate product, containing 88.5 per cent tungsten oxide.