EDM Resources Inc (TSX-V:EDM, OTC:SWNLF) announced that it has entered into a definitive gypsum offtake supply agreement with a large vertically integrated gypsum producer and Canadian wallboard manufacturer.
The agreement, valued at approximately US$58 million, will span a projected 10-year period and covers half of the gypsum reserves at EDM’s Scotia Mine in Nova Scotia.
The agreement includes a US$250,000 advance payment from the offtaker in exchange for five years of exclusivity. The payment is non-refundable and unsecured, regardless of whether production begins by the end of 2026.
The offtake contract provides for the sale of both standard and off-spec gypsum, including anhydrite, and is structured as a take-or-pay agreement with standard industry terms related to delivery, quality, warranties, penalties, and termination clauses.
"We are very pleased to secure the third revenue stream opportunity for our Scotia Mine, which is in addition to the forecast zinc and lead revenue streams,” EDM Resources CEO Mark Haywood said.
“With the execution of the new gypsum offtake agreement, the Scotia Mine secures market rate payments for at least 2.5 million tonnes of gypsum."
The Scotia Mine contains a defined gypsum mineral reserve totaling 5.1 million tonnes, as disclosed in EDM’s 2021 prefeasibility study.
The reserve includes 1.53 million tonnes of proven gypsum at a grade of 92.8% and 3.65 million tonnes of probable gypsum at a grade of 91.4%. The study estimated potential gypsum revenue of US$43.9 million based on 2021 pricing of US$8.60 per tonne.