THE BOURSE WHISPERER: Pioneer Resources (ASX: PIO) has entered into an offtake agreement with Cabot Specialty Fluids Ltd, a wholly owned subsidiary of New York-listed Cabot Corporation.
Pioneer Resources struck the deal, which will result in Cabot (NYSE: CBT) buying 100 per cent of the caesium ore to be extracted from the Sinclair Zone caesium deposit – to be known as the Sinclair mine.
The Offtake Agreement includes a US$4.8 million loan facility to fund mining operations at the proposed Sinclair mine, which is part of Pioneer’s 100 per cent-owned Pioneer Dome project near Norseman in Western Australia.
The Sinclair mine will be Australia’s first ever commercial caesium ore producer.
The US$4.8 million interest-free loan facility will fully fund mining operations at the proposed Sinclair mine to extract the project’s caesium ore in the form of the mineral pollucite.
The loan is to be offset by Pioneer through the delivery of direct shipping ore (DSO) pollucite from the Sinclair mine via the Offtake Agreement with Cabot, or by cash settlement.
The offtake agreement provides for the sale and purchase of all of the pollucite mined from proposed Sinclair mine, which will be supplied as DSO product.
“The Offtake Agreement is a significant milestone for Pioneer and for the Sinclair mine,” Pioneer Resources managing director David Crook said in the company’s announcement to the Australian Securities Exchange.
“We are delighted to have secured an off-taker with the credibility and reputation that Cabot Corporation holds.
“Within two years, the company has discovered and defined Australia’s first caesium deposit, been granted a Mining Lease, completed a robust mining study for the proposed Sinclair mine, and are advancing the statutory mining approval process.
“We now add to that the execution of the Offtake Agreement – a key element of which is the US$4.8 million loan facility which provides sufficient funds to extract the caesium (pollucite) ore from the Sinclair mine, with delivery as a DSO product to a global caesium specialist.”