Andromeda Metals Ltd (ASX:ADN) has a second binding offtake agreement under its belt to supply its Great White KCM™90 product from the Great White Kaolin Project in South Australia to Japanese porcelain manufacturer Plantan Yamada Co Ltd.
Plantan Yamada has been analysing and testing samples at laboratory, pilot scale and full commercial scale over the last three years, including a 40-tonne batch of Great White material. It also manufactured a large batch of high-quality porcelain items to develop a sufficiently high level of confidence to sign the agreement.
While the agreement is subject to standard conditions, the near-term producer of the halloysite-kaolin industrial mineral will produce and supply up to 43,000t of KCM™90 over the first three years of operation at a price in excess of the definitive feasibility study (DFS) pricing.
Price reviews will be made at 12 months, with automatic extension for ongoing years subject to agreement.
This second agreement comes just weeks after the company signed with Asia Mineral Resources for Great White KCM™ 90.
Read: Andromeda Metals higher on inking key halloysite-kaolin offtake deal with Asia Minerals Resources
Great White halloysite-kaolin offers both high quality and long-life reliable strategic supply, drawing strong interest globally from potential customers despite COVID travel restrictions disrupting meetings with potential offtake customers.
Four offtake agreements in the bag
Andromeda is in further talks with potential offtake partners for the initial Great White plant output to further de-risk the project, including the Great White HRM™ concrete additive and Great White SRM™ suspension aid additive, where a letter of intent for exclusive distribution rights into Asia/Pacific has already been signed with IMCD, the world’s largest additives distributor.
The company currently has four major binding offtake agreements in place, which includes three products over four stages of the production ramp-up.
Andromeda managing director James Marsh said, “This agreement with a multi-generational leading Japanese porcelain producer a yet another significant milestone for Andromeda and the Great White Kaolin Project.
"It is the second binding agreement for our initial Great White KCM™90 product and provides excellent support for the strategic decision to start with this in stage one of operations.”
About Plantan Yamada
Yamada is a multi-generational ceramics company with headquarters in Nagoya, Japan and production facilities in China and Japan.
It is involved in the manufacture and sale of more than 2,000 different, high-quality porcelain products as well as raw materials for ceramics. Its tableware products are used extensively throughout Japan, where reputation is crucial, as well as being exported around the world.
Gaining customer approvals and offtake agreements for industrial minerals products such as halloysite-kaolin is an extremely intensive and lengthy process. It involves a significant investment of resources and testing by the target customers, to the extent they are fully convinced of their ability to supply very consistent and economically viable products over a long period before they are willing to commit to a binding agreement.