Tertiary Minerals has signed a memorandum of understanding (MoU) with global commodities trading group Possehl Erzkontor in an attempt to reach a definitive purchase and sales agreement.
Under the terms of the agreement, Tertiary is expected to sell at least 70% of commercial grade acid-spar to be produced at its three fluorspar projects to Possehl.
In exchange for the offtake rights, Possehl will offer a portion of the pre-financing that will enable Tertiary to meet its working capital needs and/or its capital investment needs for the development of its fluorspar projects.
Tertiary Minerals managing director Richard Clemmey said: “The relationship represents a critical building block in our quest to becoming a leading supplier of fluorspar to the global markets.
“Not only does this provide the company with the opportunity, and competitive advantage, to secure long-term sales contracts with key fluorspar end users but also access to pre-financing, which can form an important part of the overall development funding package for our fluorspar projects and potential future acquisitions.”
The MoU also provides for pre-financing to be provided by Possehl to fund any of Tertiary’s near-term fluorspar acquisition targets.
In addition, Tertiary will receive commercial and logistical support and advice from Possehl during the development of its fluorspar projects.
The company’s project portfolio includes Storuman in Sweden, Lassedalen in Norway and MB Project in Nevada, US.