Technology Metals Australia Ltd. said Oct. 1 that it signed a nonbinding memorandum of understanding with Shaanxi Fengyuan Vanadium Technology Development Co. Ltd. for an off-take agreement on the Gabanintha vanadium project in Western Australia.
Under the MOU, which is valid until Dec. 31, Fengyuan will initially purchase up to 3,000 tonnes per annum of vanadium pentoxide, based on availability, during the ramp-up and commissioning phase of the project on a take-or-pay basis.
The pricing will be negotiated based on the Metal Bulletin V2O5 pricing index or similar, incorporating a floor and ceiling price structure.
The sales will be based on carriage and insurance paid at Fengyuan's selected port in China.
The agreement will have a minimum term of five years with an option to renew for an additional five years.
In August, Technology Metals said a definitive feasibility study outlined a posttax net present value of A$870 million, at a discount of 8%, with an internal rate of return of 27.3% and a 3.2-year payback period.
