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.
Avanti previously 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.