Nordic Mining ASA said Nov. 20 that it signed a heads of agreement with Barton Group for the commercial off-take of garnet products from the Engebo rutile-garnet project in Norway.
The agreement builds on the memorandum of understanding the parties signed in 2011.
Under the deal, Barton will have exclusive distribution rights over Engebo garnet to the North American markets.
The companies also plan to negotiate and establish a joint venture company for the sale of garnet to other markets.
In addition, Barton intends to participate in the pre-construction CapEx to develop the Engebo project.
The financing will be on the same terms Nordic is offering to other investors should it decide to pursue an equity issue to raise the required funds.
Barton also plans to participate in the construction of the project.
"The form and amount of Barton's contribution will be further negotiated and evaluated as part of the total solution for project financing," the company said.
Nordic's pre-feasibility study for the Engebo rutile-garnet project estimated a pretax net present, value discounted at 8%, of US$332 million, a 23.8% internal rate of return and a payback period of under five years. Upfront capital costs for the project were pegged at US$207 million.