THE BOURSE WHISPERER: Platina Resources (ASX: PGM) has signed a Heads of Agreement (HoA) with Chinese manufacturer Inner Mongolia Honfine Zirconium Industry Co Ltd to negotiate both an Off-take Agreement and a Supply, Technology, Processing and Marketing Agreement for the company’s Owendale Scandium project in central New South Wales.
Under the terms of the HoA, Platina and Honfine will negotiate an Off-take Agreement for the supply of 15 tonnes of scandium oxide at a 99.9 per cent purity grade and at a commercially acceptable price.
Although pricing and other terms are yet to be agreed, Platina did point out that within the past four years candium oxide (99.9% purity) has sold within a range of US$1,400 to 3,700 per kilogram.
Platina said the aim of the HoA will be to finalise and execute a binding Off-take Agreement and a binding Supply, Technology, Processing and Marketing Agreement within the next three months.
Both companies will evaluate the viability of transporting scandium concentrates grading 1000ppm or higher from Australia to China to be processed at Honfine’s factory located in Inner Mongolia and marketed throughout China and the world.
Platina indicated it is currently working on a metallurgical test work program to produce high-grade scandium concentrate from the Owendale project, adding the potential flowsheet for scandium concentrate could reduce the project’s capex and opex.
The two companies also intend collaborating to establish the cheapest processing technology required to produce the desired scandium products from Owendale ore.
“The HoA with Honfine heralds a milestone in the commencement of a scandium production industry,” Platina Resources managing director Rob Mosig said in the company’s announcement to the Australian Securities Exchange.
“We look forward to making further announcements regarding advancing the Off-take and Supply, Technology, Processing and Marketing Agreements as soon as possible.”
Owendale scandium resource area. Source: Company announcement
The Owendale project hosts an Indicated and Inferred Mineral Resource (JORC 2012) of 24 million tonnes of scandium grading 384ppm scandium (at a cut-off of 300ppm) and contains a total in-situ content of 9,100 tonnes of scandium metal.