Tawana Resources (ASX: TAW) has clinched an offtake agreement with a “leading international tantalum industry specialist” for its expected tantalum concentrate production from its 50%-owned Bald Hill lithium and tantalum project in WA’s eastern goldfields.
Under the contract, the tantalum buyer will purchase a total of 600,000 pounds of standard grade tantalum between April 2018 and the end of 2020 from Tawana and its joint venture partner Alliance Mineral Assets (SGX: AMA).
Additionally, the buyer has the right to purchase other Bald Hill tantalum such as low grade or non-standard material.
“With the Ball Hill mine due to commence tantalum production in the first half of 2018, we are pleased to have reached a tantalum supply agreement with a true market leader in the field,” Alliance Mineral Assets chief executive officer Tjandra Pramoko said.
There is a two-month deadline for the parties to cement the contract with a binding offtake agreement.
Bald Hill comprises 774 square kilometres and has initial ore reserves of 4.3 million tonnes grading 1.18% lithium and 208 parts per million tantalum.
The project also has an additional tantalum reserve of 1.4mt grading 317 parts per million tantalum.
According to the pre-feasibility study, the reserve combined with existing inferred resources could underpin a 10-year operation.
A pre-feasibility study for the project was finalised in July last year which anticipated annual production of 155,000tpa spodumene concentrate and 260,000 pounds per annum of tantalum pentoxide.
Mr Pramoko said the joint venture was also in discussions with other potential tantalum buyers for the remainder of forecast tantalum concentrate production from Bald Hill.
Mining has begun at Bald Hill with construction activities nearing completion.
The project is fully funded to production of its first lithium concentrate which is scheduled to begin by the end of the current quarter.
Further exploration and resource drilling is planned during 2018.
Shares in Tawana had slipped 1% to A$0.50 by mid-day.