Perpetual Resources Ltd (ASX:PEC) has signed a Memorandum of Understanding (MOU) with China-based C&D Group Co Ltd, which covers indicative interest to purchase 600,000 tonnes per annum of high-grade silica sand from the Beharra Project in Western Australia.
C&D Group is a wholly-owned division of Xiamen C&D Co and its core business is supply chain sourcing and operations, with activities in a broad array of business sectors, including:
- Metals and minerals;
- Pulp and paper;
- Food and Textiles;
- Agriculture; and
- Energy and chemicals.
“Market interest continues to grow”
Silica sands have an extensive range of uses including lower purity and grade applications such as construction sand, proppant sand used in well fracturing and foundry sand.
With increasing purity (>99.5% SiO2) uses includes glass making including clear glass and uses for purity >99.8% includes semi-conductor fillers, LCD screens and optical glass.
PEC executive chairman Julian Babarczy said: “After the announcement of our recent exciting metallurgical testing results, the market interest in Beharra silica sand continues to grow.
“We are encouraged by the interest shown in the Beharra end product by major Chinese supply chain business C&D Group, which is part of the broader group of companies headed by Xiamen C&D Co Ltd, which is a significant supplier of raw materials to a vast array of industries throughout mainland China.
“We look forward to working with C&D Group in the months ahead on details of a potential offtake agreement.”
MOU details
The MOU with C&D contemplates the purchase of 600,000 tonnes per annum of high-grade silica sand from the Beharra Project.
Both parties have agreed to negotiate the terms of a legally binding offtake agreement, which will contain specific terms in respect of pricing and payment structure, by no later than June 30, 2022.
The MOU is also binding on both parties, although non-exclusive until such time as a definitive offtake agreement is entered into.
Looking forward
Negotiations around final product attributes, product pricing and payment terms will progress in coming months, with more definitive pricing discussions subject to the outcomes of the recently announced 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 is expected to be finalised in July 2021.