Africa-focused Force Commodities (ASX: 4CE) has collared a binding offtake agreement for 100% of the anticipated lead and silver production from its recently acquired Tshimpala project in Malawi.
Under the agreement, global commodities trading group Swiss-based Transamine Trading SA has the right to purchase all the lead and silver generated from Tshimpala on an “evergreen” basis.
Pricing will be based on the prevailing London Metals Exchange benchmark price for lead and the LBMA silver price.
“I am delighted that we have been able to finalise this offtake agreement with such a well-respected and established global commodities trading group as Transamine,” Force managing director Jason Brewer said.
“All of us at Force look forward to now working with Transamine, as we progress the high-grade lead and silver Tshimpala project in Malawi,” he added.
Force cemented an initial 51% stake in Tshimpala earlier this month after a 60-day due diligence period.
As part of the acquisition, Force reimbursed the vendor US$50,000 for incurred historic costs.
Force will spend US$850,000 on advancing the project over the next 18-months.
Additionally, Force will issue a combined 80 million paid ordinary shares to the vendors.
Tshimpala is about 45km from Malawi’s capital city Lilongwe and comprises three exploration licences and a mining licence application.
Spanning 1,414 square kilometres, the project hosts numerous current and historic small-scale mine workings.
As well as its proximity to Malawi’s capital, Tshimpala is surrounded by “excellent” infrastructure including a direct sealed road, rail and access to national grid power.
Late last year, trial mining was carried out at Tshimpala’s Grand Canyon, Riverside and Small Canyon prospects.
A bulk 100t sample was evaluated and confirmed an “exceptionally high-grade” product averaging 60.48% lead and 735 grams per tonne silver.
Additionally, a 2.3kg sample from Grand Canyon was analysed and yielded an average lead grade of 85%.
Force will centre phase one exploration and development at Grand Canyon, Riverside and Small Canyon, with the program to include test pitting, trenching, sampling, ground electro-magnetic surveys and further geological mapping and modelling.
Today’s offtake news pushed Force’s share price up more than 18% to $0.026 in afternoon trade.