NEW YORK Avanti
Mining Inc. has signed an offtake agreement with ThyssenKrupp
Metallurgical Products GmbH (TK MetPro) for 50 percent of the
total molybdenum production from its Kitsault project in
northern British Columbia.
The agreement, which
covers the life of the mine, will also see TK MetPro, part of
Essen, Germany-based ThyssenKrupp AG, become the exclusive
sales agent for Avantis products in Europe and North
America. The mine is expected to produce an estimated 374
million pounds of molybdenum over 16 years (
amm.com, Feb. 6).
The quantity of
molybdenum sold and consumed inside Germany is sufficient to
qualify Avanti for an "untied loan guarantee" (UFK) under the
German governments raw material import policy, according
to the Vancouver, British Columbia-based mining company.
received UFK approval in principle and has now applied for
formal approval through Frankfurt-based KfW IPEX-Bank GmbH,
which is acting as Avantis UFK agent. KfW and
Munich-based UniCredit Bank AG previously had been mandated to
collectively provide under the UFK program $300 million of the
total project finance facility needed for the development of
the Kitsault Mine.
"The TK MetPro
agreement is an important step in securing Kitsaults
financing through the UFK program," Avanti chief financial
officer A.J. Ali said. "We look forward to concluding our
discussions with potential Asian partners for a similar
transaction in order to assist in the completion of the debt
financing for the project."
The offtake agreement
represents about $2.7 billion of potential molybdenum revenues
at the price assumptions reported by Avanti in its feasibility
study update in February. TK MetPro also has the right of first
refusal for any additional molybdenum production developed by
Avanti on other projects during the term of the agreement.