Argosy Minerals (ASX: AGY) has signed an offtake deal with Mitsubishi Corporation RtM Japan Ltd for the supply of preliminary production from its flagship Rincon lithium project in the Salta Province of Argentina.
Exact quantities and prices have not been disclosed, however Argosy today confirmed the price of each cargo would be determined using a set formula agreed between the companies which references an industry-standard benchmark index LCE (or lithium carbonate equivalent) product price, adjustments for product specifications, associated shipping costs and Mitsubishi’s commission fees.
Once in effect, the offtake deal will enable Argosy to utilise its stage one industrial scale pilot plant for small-scale commercial lithium carbonate production and export sales.
Argosy has previously conducted comprehensive processing and sample test work at the pilot plant and proven its industrial-scale proprietary chemical process solution.
With pilot plant operations scheduled to commence mid-year, managing director Jerko Zuvela said the agreement reinforces the relationship between the two companies which kicked off in 2017.
“This [offtake] relationship is a strong endorsement of the Rincon project and our fast-track development strategy towards commercial production,” he said.
“We place considerable importance on working with Mitsubishi RtM and the potential longer term benefits this [offtake] relationship may deliver.”
The Rincon project is located within the famed “lithium triangle” of South America and is being fast-tracked to capitalise on forecast growth in the lithium-ion battery sector.
Argosy has already received interest from a large Korean battery manufacturer for the supply of high-purity lithium hydroxide samples, to be prepared at an in-house laboratory associated with its stage one pilot plant.
Last month, the company said it was preparing the regulatory documents and permitting applications required to attain development approval for a proposed 2,000 tonnes per annum lithium carbonate processing plant and associated operations at the project site.
Permit applications are also being prepared for approvals to advance the project direct to full-scale commercial production of approximately 10,000tpa.
Mr Zuvela said Argosy will continue prioritising efforts to secure a strategic funding partnership for Rincon’s commercial development.
Discussions have been held with a consortium of South Korean groups regarding potential arrangements for commercial scale, long-term product offtake and accompanying capital expenditure funding solutions.
In November, Argosy announced an 18% increase to the Rincon project’s original mineral resource estimate with “excellent scope” for further expansion.
At mid-afternoon, shares in Argosy Minerals were trading 61.86% higher at $0.157.