Pilbara Minerals Ltd. entered off-take agreements to sell lithium-tantalum direct shipping ore to Atlas Iron Ltd. and tantalum pentoxide to a unit of Global Advanced Metals Pty. Ltd.
The company will source material for both agreements from the Pilgangoora lithium-tantalum project in Western Australia.
Pilbara Minerals said Dec. 20 that it will deliver at least 1.0 million tonnes of unprocessed run-of-mine lithium-tantalum material from Pilgangoora on a mine gate sale basis to Atlas.
The delivery schedule under the agreement allows Atlas to ship 100,000 tonnes of direct shipping ore per month to off-take customers, starting in the June 2018 quarter, the company noted.
Atlas will use its existing infrastructure to crush material at its Mount Dove operations and ship the direct shipping ore to customers through its Utah Port shipping facilities in Port Hedland under future off-take agreements.
The company noted that it executed a memorandum of understanding with Sinosteel Australia Pty Ltd. for a potential off-take of up to 1.5 million tonnes.
Atlas will pay a mine gate commitment fee of US$3 million to Pilbara Minerals to fund its upfront establishment costs associated with the direct shipping ore program, which will be repaid by offsets against the first six invoices issued to Atlas for material sales.
Additionally, the companies agreed to extend the deadline for Pilbara Minerals to spend A$1 million on exploration at the Mount Francisco project to October 2018.
Completion of access agreements is targeted by March 2018, with drilling expected to start in the June quarter.
Global Advanced subsidiary Global Advanced Metals Greenbushes Pty. Ltd. will purchase 100,000 pounds of contained tantalum pentoxide as primary 4% to 5% concentrates over two years.
The supply is targeted to start in the second half of 2018, according to a separate same-day release.
The off-take covers part of the forecast annual production from the first stage of Pilgangoora of 321,000 pounds per annum of tantalite at a targeted lower-grade concentrate.
Pilbara Minerals recently increased the CapEx estimate for the stage-one development of the Pilgangoora property by 17% to A$274 million.