Pure Minerals acquisition target Queensland Pacific Metals strengthens ties with China
Queensland Pacific Metals has entered into a memorandum of understanding with Top Resources Group.
A soon-to-be-subsidiary of Australian explorer Pure Minerals (ASX: PM1) has made moves to strengthen its business ties with China and the greater Asian region via a memorandum of understanding with commodity trading house Top Resources Group.
Under the terms of an agreement announced this morning, aspiring battery metals producer Queensland Pacific Metals will receive assistance from Top Resources to establish relationships with companies in Asia with a view to securing offtake agreements or potential investments in QPM’s planned battery materials refinery.
The Townsville-based refinery will produce nickel and cobalt sulphate, and other valuable by-products including hematite, magnesium oxide and high purity alumina.
Chinese expertise
Top Resources is headed by experienced commodity trader Norman Ting, previously linked to London-based trading house and Chinese market specialist Wogen Resources.
Typical commodities traded by Wogen include nickel, cobalt and other base metals and related speciality chemical products of these metals.
During his time with Wogen, Mr Ting managed five offices in Beijing, Shanghai, Guangzhou, Chengdu and Hong Kong and was a leading trader of cobalt, cadmium, antimony, tungsten, indium and mineral sands.
Wogen was also a marketing agent for Queensland Nickel Refinery’s cobalt chemicals in China.
QPM Director John Downie said China has been considered an “obvious trading partner” for the company.
Battery metals production
QPM is a private Australian entity seeking to develop a modern refinery in Townsville to produce nickel sulphate and cobalt sulphate for the battery industry.
The company has five-year ore supply agreements in place with New Caledonia’s Societe des Mines de la Tontouta and Societe Miniere Georges Montagnat SARL, from which QPM will purchase 600,000 tonnes per annum of nickel and cobalt ore at minimum grades of 1.4% nickel and 0.15% cobalt.
The ore will be treated using direct nickel proprietary processing technology at the Townsville plant.
In October, Pure Minerals entered into a binding option agreement to acquire 100% of QPM following a 45-day period of due diligence on the company and its assets.
Last month, a report by Xenith Consulting, which was engaged to conduct the due diligence, confirmed the New Caledonian producers use industry-standard mine planning and geology processes.
Moving forward
The findings pave the way for Pure Minerals to move forward on its acquisition plans.
Should the company exercise its option to acquire QPM, it will immediately issue 66.68 million shares to the vendors, as well as $500,000 in cash.
A further 333.32 million shares will be issued to the vendors upon Pure Minerals reaching various development milestones.
If the acquisition goes ahead, Top Resources and QPM have agreed to establish a “formal and mutually-beneficial” commercial agreement to pursue entry into the Chinese market.
At mid-morning, shares in Pure Minerals were steady at $0.015.