Altura Mining (ASX: AJM) has now secured offtake agreements for 100% of its planned lithium production from its namesake mine after inking a contract with Ganfeng Lithium’s subsidiary GFL International.
Under the agreement, GFL International will purchase 70,000 tonnes per annum of 6% spodumene concentrate from Altura’s operation between 2019 and 2021. However, GFL will start purchasing lithium during the current quarter with a minimum 8,000t commitment.
GFL will also make an US$11 million pre-payment on the 2019 lithium shipments and has the option to purchase additional concentrate produced under the stage one operation.
According to Altura, this latest agreement means 100% of its planned production has been spoken for via various offtake arrangements.
“Ganfeng is one of the largest and most respected lithium companies in the world and an offtake agreement with them is further proof of the quality of the product we are producing from the Altura lithium operations,” Altura managing director James Brown said.
“The terms of agreement the floor price component of our existing offtakes, which provides us with significant security while the agreed pre-payment provides a healthy working capital buffer during the ramp-up phase,” Mr Brown explained.
Meanwhile, Altura’s existing offtake arrangement with Shaanxi J&R Optimum Energy has been altered to reduce Shaanxi’s commitment from 100,000tpa spodumene concentrate to 50,000tpa from 2019 and onwards.
Altura claims these new arrangements will expand its existing customer base and provide it with more flexibility as Shaanxi continues with its current restructuring.
“We are producing a high-grade product that is highly sought after. We continue to field inquiries regarding offtakes, which is a testament to the quality of the Altura lithium concentrate and evidence there is still long-term global demand,” Mr Brown added.
Altura lithium operation
Altura transitioned from developer to miner mid-year when it produced its first lithium spodumene concentrate.
Since then, Altura has been ramping up its operations to produce 220,000tpa of 6% spodumene concentrate.
Meanwhile, a definitive feasibility study was published in April this year and estimated a stage two duplicate plant could boost the company’s spodumene concentrate output to 440,000tpa.
New offtake partner GFL has an option to purchase 50% of the spodumene concentrate planned under the stage two operation.
Underpinning the operation, is a current resource of 44 million tonnes grading 1% lithium for 441,000t of contained lithium.
Total reserves are estimated at 34.2Mt grading 1.04% lithium for 356,600t of lithium.
Regional exploration is underway to extend resources.
Investors reacted positively to the offtake news, with the company’s share price soaring almost 30% to reach $0.232 in early afternoon trade.