Argosy Minerals Limited (ASX:AGY) has surged 65% this afternoon to 16 cents after executing a sales agreement with a Mitsubishi Corporation subsidiary covering a preliminary arrangement for the supply of lithium carbonate from Rincon Lithium Project in Argentina.
The preliminary lithium carbonate sales agreement has been arranged with Mitsubishi Corporation RtM Japan Ltd.
It will enable Argosy to utilise a stage I industrial-scale pilot plant for small-scale commercial lithium carbonate production and product sales to a major international conglomerate.
This will follow comprehensive processing and sample test-works carried out utilising Argosy's pilot plant and proven industrial-scale proprietary chemical process solution.
The company is targeting the start of operations for the sales agreement in mid-2019.\
"A strong endorsement"
Argosy managing director Jerko Zuvela said: “Argosy places considerable importance in working together with Mitsubishi RtM and the potential longer-term benefits this relationship may deliver.
“It is also a strong endorsement of Argosy, the Rincon Lithium Project and our fast-track development strategy towards commercial lithium carbonate equivalent (LCE) production.”
Reinforces Mitsubishi relationship
The sales agreement reinforces the relationship Argosy has established with Mitsubishi RtM following their first site visit in November 2017.
It also further strengthens the commitment for future potential commercial associations.
This agreement will generate revenue while the company progresses development works toward commercial sales operations.
The sales price for each cargo will be determined using a set formula agreed between the parties that references an industry standard benchmark index LCE price, netting off in country taxes for product specifications, all associated shipping costs and Mitsubishi RtM commission fees.
Resource to Market
Mitsubishi Corporation RtM Japan Ltd is a metals and mineral resources trading company that deals in a wide spectrum of general metal resources and materials, including ferrous raw materials and non-ferrous metals. The RtM of the name is an abbreviation of Resource to Market.
The agreement provides flexibility to amend the arrangement for the mutual benefit of both parties.
Argosy will continue prioritising efforts to secure a strategic relationship/partnership to secure a capex funding solution for commercial development of the Rincon project.
These efforts will include continued discussions with various interested parties.