Pigment producer Venator Materials to purchase Strandline Resources’ rutile from Coburn

Strandline Resources ASX STA binding offtake deal Coburn rutile mineral sands Venator Materials
Strandline Resources has now locked-in binding offtake agreements for more than 90% of its expected production from Coburn, with the remaining zircon to be sold on the spot market.

Strandline Resources’ (ASX: STA) Coburn mineral sands project is another step closer to development with the company cementing a binding final offtake deal with titanium dioxide pigment producer Venator Materials.

Venator has agreed to take 100% of the rutile produced at Coburn over five years, which is anticipated to generate up to 20% of the mine’s forecast revenue during the period.

The agreement with Venator now means Strandline has locked in binding offtake agreements for more than 90% of its forecast production from Coburn.

All-up the binding contracts are anticipated to bring in about US$600 million (A$850 million) in revenue over five years.

“The signing of another longer-term offtake agreement with an industry leader provides further endorsement of Coburn and the high quality of its mineral sands products,” Strandline managing director Luke Graham said.

“With over 90% of the project’s revenue now underwritten by binding sales contracts with major customers and a significant portion of the development funding secured via the Northern Australia Infrastructure Facility loan, Strandline is on track to become Australia’s next world scale mineral sands producer,” Mr Graham added.

Uncontracted production to be sold in spot market

The remaining 10% of uncontracted production from Coburn is a premium finish ceramic grade zircon.

Strandline plans to sell this under shorter-term spot market contracts.

Project finance close

Securing the binding rutile offtake agreement for Coburn follows a busy end to 2020, which resulted in power contracts allocated and a port access agreement for the project.

The company is in detailed discussions with lenders it has shortlisted to provide the remaining $100 million required to develop Coburn.

This $100 million will compliment an existing $150 million loan from the Commonwealth Government’s Northern Australia Infrastructure Facility.

Of the $150 million NAIF loan, $130 million has been allocated to construction at Coburn, with the remaining $20 million to go towards an access road

Strandline is working on finalising the finance options “as soon as possible” with the aim of selecting the “most attractive commercial terms”.

A definitive feasibility study released last year estimates it will require $260 million to develop Coburn.

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