Mitsubishi signs on for Mt Cattlin

GENERAL Mining Corporation has signed a sales and distribution agreement with Mitsubishi Corporation for spodumene concentrate produced at the Mt Cattlin mine in Western Australia.
Mitsubishi signs on for Mt Cattlin Mitsubishi signs on for Mt Cattlin Mitsubishi signs on for Mt Cattlin Mitsubishi signs on for Mt Cattlin Mitsubishi signs on for Mt Cattlin

Mt Cattlin

Kristie Batten

Under the agreement, Mitsubishi will have the rights to sell up to 100% of spodumene concentrate produced from Mt Cattlin exclusively into China, South Korea, Taiwan and Vietnam.

Mitsubishi, one of the world’s largest traders of lithium products, will act as principal buyer and pay General Mining directly before on-selling the concentrate, while using “reasonable endeavours” to get the best selling price.

The deal has a four-year term with the option for a one-year extension.

The two companies will also look into downstream processing opportunities.

General Mining executive chairman Michael Fotios said the company was delighted to secure Mitsubishi as a partner.

“This binding agreement with an international tier one trading house offers exclusive and unrivalled access in four priority markets where demand for battery grade spodumene concentrate is robust,” he said.

“Importantly, it marks another key milestone in our pathway to production at Mt Cattlin targeted for commencement in the first quarter of 2016.”

General Mining recently wrapped up the acquisition of a 50% stake in Mt Cattlin from Galaxy Resources.

The company will spend $A7 million at Mt Cattlin to restart production by the end of March, followed by three quarterly payments of $6 million due to Galaxy after the recommissioning.

Earlier this month, a review found that Mt Cattlin could produce around 111,500 tonnes per annum of spodumene over an initial 17-year life.

The review estimated life-of-mine revenue of $1.1 billion and net cashflow of $526 million for a net present value of $247.5 million and an internal rate of return of 230%.

Mt Cattlin has been on care and maintenance since July 2012.

Shares in General Mining dropped 7.7% to 18c, while Galaxy shares rose 9% to 7.2c.