Auxico Resources Canada Inc (CSE:AUAG, OTC:AUXIF) has signed a joint-venture agreement that will provide the company with a new potential source of revenue from high-grade tin trading operations in Colombia.
The agreement gives Auxico a 70% profit share on all sales of tin ore executed with Gracor SAS. The goal is to export at least 100 tonnes per month of high-grade tin at average grades exceeding 65% tin content, which could potentially commence as of the end of December.
Gracor's principal business is the purchase of tin from the indigenous population in the state of Vichada, Colombia. Specifically, the firm is purchasing ore rich in tin content, sourced from and hosted in alluvial sands on properties close to Auxico's Minastyc property in the state.
READ: Auxico Resources exports 432 tons of rare earth concentrates from The Democratic Republic of the Congo
"A discovery of alluvial sands running exceptionally high-grades of tin implies a massive opportunity for the company to immediately enter the tin trading market and establish a second revenue stream outside of its successful rare earth trading operations in the Democratic Republic of Congo,” Auxico CEO Frederick Kozak said in a statement.
“Tapping into additional high-grade sources of tin outside of and in addition to the established mineral content and resource of the Minastyc property, is an enormous value proposition to increase shareholder value."
As part of the agreement, Auxico will provide Gracor with working capital to increase its direct purchases and will sell tin according to international standards and in relation to offtake agreements already in place, the company said.
Auxico noted that the three-month bid price of tin per tonne is ± US$18,400 on the London Metal Exchange as of October 26.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel