Red River Resources Ltd (ASX:RVR) has finalised offtake agreements for the zinc and lead concentrates to be imminently produced from its Thalanga Zinc Project in Queensland.
The offtake agreements are with Trafigura Pte Ltd and are fixed tonnage contracts, with tonnage anticipated to be produced during the first three year period of commercial production.
The agreements are structured to help minimise Red River’s working capital requirements.
Mel Palancian, managing director, commented: “The execution of zinc and lead concentrate offtake agreements with Trafigura is the culmination of a competitive process involving a number of leading trading and smelting companies.
“The highly competitive nature of the process has allowed us to obtain outstanding offtake terms for both zinc and lead concentrates which will contribute to the success of Thalanga.”
Offtake with Trafigura
The offtake agreements are in respect of 122,000 dry metric tons of zinc concentrate and 27,400 dry metric tons of lead concentrate.
Pricing is to be determined by reference to applicable metal prices on the London Metal Exchange at the time of shipment, with tonnage expected to be shipped in the first 36 months following commencement of commercial production.
Under the terms of the agreements, zinc and lead concentrates will be trucked circa 200 kilometres to the Port of Townsville, for onward delivery to customers.
Trafigura was founded in 1993 and is one of the largest physical commodities trading groups in the world.
Facility agreement
Red River has also entered into a facility agreement with Trafigura, pursuant to which Trafigura will make available up to US$10mln.
This funding will be available to assist, if required, with the costs of production and general working capital expenses.