Tantalex Lithium Resources (CSE:TTX, OTC:TTLXF) told investors it has concluded its previously announced lithium marketing offtake agreement with Glencore AG, which will also see the mineral trading giant provide it with $5 million under a convertible financing facility.
In a statement, the company noted that the marketing offtake agreement covers 100% of the lithium to be produced from its Manono lithium tailings project in the Democratic Republic of Congo.
Glencore will be responsible for all sales from Manono from the start of commercial production and will contribute a third of the total capital expenditure (capex) for the project, it added.
The capex contribution is subject to Glencore’s satisfactory review of the project’s feasibility study within 60 days of receipt of the final version of the study and the balance of the required capex being fully funded.
As well as other conditions, both parties should mutually agree on the drawdown schedule of Glencore’s capex contribution, Tantalex said.
“This is again a significant milestone for us as we pursue with our objective to de-risk the project and keep with our target of bringing our Manono Lithium Tailings Project into production,” Tantalex Lithium CEO Eric Allard commented.
“With our recent PEA which outlined a US$147M CAPEX for a 112,000 tpa (tons per annum) SC6 production, this strategic support from Glencore will solidly complement our efforts to firm up the other 2/3rd of the capital expenditure costs.”
Under the convertible facilities agreement, the first tranche of $2 million will be paid upon execution of the offtake agreement, with $3 million payable upon the satisfactory review of the preliminary economic assessment of the project.
Tantalex said it has also agreed to pay Glencore a facility fee in an amount equal to 1.5% of the aggregate amount of the Facilities as of the closing date.
The facilities are convertible at Glencore’s option.
Contact the author at stephen.gunnion@proactiveinvestors.com