Centrex Metals Limited (ASX:CXM) has signed a memorandum of understanding (MOU) with Gujarat State Fertilisers & Chemicals Ltd (NSE:GSFC) for the supply of product from its Ardmore Phosphate Rock Project in Queensland.
GSFC is a major Indian fertiliser and chemical manufacturer listed on the National Stock Exchange of India (NSE).
Under the terms of the MOU, Centrex will provide the required samples to GSFC’s selected technology providers for its new large-scale phosphoric acid plant for their trial and acceptance.
Binding off-take agreement materialising
Centrex and GFSC are in the process of negotiating a binding agreement comprising the key terms of supply.
Based on the outcome of the testing, GSFC and Centrex intend to finalise an off-take agreement for the supply of about 300,000 tonnes of phosphate rock from Ardmore over its proposed 10-year mine life.
Importantly, this represents close to 40% of Centrex’s proposed output from the project.
Key step in expediting production from Ardmore
Centrex managing director and chief executive officer Ben Hammond said; “With such a large user as GSFC showing interest on a long-term basis in our proposed premium grade ultra-low cadmium product, signing the MOU with them is a key step in expediting production from Ardmore.
“The potential already to sell almost 40% of our proposed output to GSFC over the mine life, should give the market further confidence in what is a straight forward and simple mine development with a relatively low capital cost.”