Core Exploration Ltd. said Dec. 1 that it signed a binding off-take agreement with Sichuan Yahua Industrial Group Co. Ltd. unit Ya Hua International Investment and Development Co. Ltd. for output from its Finniss lithium project in Australia's Northern Territory.
Under the deal, Core Exploration granted Ya Hua the right of first refusal for the direct shipping ore from the Grants lithium deposit and surrounding exploration license EL 29698 for either 500,000 tonnes of lithium ore or 25% of the forecast production for a year, whichever is greater.
The agreement is effective for five years or at the completion of the supply of 1 million tonnes of direct shipping ore, whichever is earlier, and may be extended by mutual agreement.
A revised off-take deal may be necessary should Core Exploration elect to produce lithium concentrate instead.
In addition, Ya Hua agreed to provide a US$20 million prepayment, to be used for developing the Grants lithium deposit. The prepayment will be offset through delivery of either direct shipping lithium ore, lithium concentrate or cash.
Should Core Exploration draw down on the prepayment facility, Ya Hua's first right of refusal will be extended to a first right over 50% of the production of direct shipping lithium ore or lithium concentrate from the Finniss tenements.
