Western Magnesium Corp. (TSX-V:WMG, OTCQB:MLYF) told investors that the memorandum of understanding (MOU) recently signed with CCMA LLM has been turned into a definitive agreement.
The company said CCMA will now work with its technical team to develop and identify demand for magnesium new alloys for various industries such as the automotive, aerospace, eco-friendly tech companies and the Department of Defense. Through the definitive agreement, CCMA is securing 25,000 metric tonnes for purchase from future production from its main plant, it added.
“This definitive agreement reflects the growing demand for magnesium metal within various industries, and CCMA’s desire to secure our future production shows this critical metal is in high demand and limited supply,” Western Magnesium CEO Sam Ataya said in a statement.
READ: Western Magnesium inks MOU with CCMA to sell magnesium products in US
Western Magnesium noted that New York-based CCMA has emerged as an independent, knowledgeable, and innovative trading house focused on metals, alloys, and other raw materials. With years of experience in the magnesium industry, it said CCMA is a catalyst for global trade, efficiently bridging producers and consumers of raw material commodities.
The company said the agreement will combine its current commercial pilot and full commercial-scale production, with CCMA’s vast market knowledge to provide it with target products, and customers in different industries throughout the US and eventually the world market.
CCMA will manage the global sales, logistics, financing, and marketing of Western Magnesium products from the new plant, through to the final consumers. It said CCMA’s familiarity with consumers of commodities makes it an ideal channel for the company. It will begin to secure purchase orders from its established client base in various industries for the magnesium metal samples produced from the commercial pilot plant. This will include the securing of magnesium metal and alloy supply from Western Magnesium’s full-scale commercial facility starting with end users in the US such as the automotive, aluminum, die-cast, and aerospace industries, as well as eco-friendly technology companies.
“By obtaining letters of intent to purchase product once full commercial production comes online, Western Magnesium can focus on the build-out of its commercial plant and being the main domestic supplier of “green” magnesium metal for the US military and industry,” Ataya said.
Western Magnesium's goal is to be a low-cost producer of green, primary magnesium metal, a strategic commodity prized for its strength and lightweight. Unlike outdated and costly production processes, the company looks to use a continuous silicothermic process to produce magnesium, which significantly reduces labor and energy costs relative to current methods and processes, while being environmentally friendly.
Contact the author at stephen.gunnion@proactiveinvestors.com