Perpetual Resources Ltd (ASX:PEC) traded higher on signing a memorandum of understanding (MoU) with a supplier of end product inputs to a range of high-end glass producers in China for the purchase of 400,000 tonnes per annum of high-grade silica sand from the Beharra Project in Western Australia.
The MoU is with Guangdong Qinyin New Material Technology Co Ltd, a purchaser, upgrader and supplier of silica sand among many other specialist commodities.
PEC shares were almost 20% intra-day to 11 cents on the arrangement with Qinyin, which has developed long-term relationships with many industry participants.
“Exciting market”
Perpetual executive chairman Julian Babarczy said: “We are extremely pleased to be entering into discussions with Qinyin regarding potential offtake for Beharra, particularly as Qinyin represents such a well-positioned and active participant in the silica sand and glass raw material input market in China.
“Demand from the photovoltaic and photoelectric glass industry in China is anticipated to grow significantly in coming years and our recent metallurgical test results show strong potential for Beharra to be a key participant in this exciting market”.
Metallurgical results expected in July
Negotiations around final product attributes, product pricing and payment terms will progress in coming months with more definitive pricing discussions subject to outcomes from a white-sand testing program, for which a drilling program is being finalised.
Results of the white sand only bulk metallurgical testing program that will underpin these product and pricing discussions are expected in July 2021.
Perpetual notes that there is no certainty that a binding offtake agreement will be reached as the finalisation of such an agreement is the subject of ongoing negotiations.
Production of silver salt chemicals
Qinyin’s business includes the production of silver nitrate, silver sulphate, silver oxide, silver hydride and other silver salt chemicals, with sales of silver salt chemicals of around 360 tonnes per year, and annual sales revenue of approximately 1.26 billion Yuan (US$200 million).
That company also produces various materials for the Chinese glass industry including silica sand, limestone, soda ash, sodium nitrate and anhydrous sodium.