This article is 8 years old. Images might not display.
A subsidiary of Hong Kong-listed Burwill Holdings will make the payment to Tawana and 50:50 Bald Hill project owner Alliance Mineral Assets (AMA) as part of a five-year offtake agreement that will fix the price of lithium concentrate in the first two years at US$880 per tonne FOB Esperance.
Bald Hill is targeted to come into production early next year at a rate of 120,000-160,000 tonnes of concentrate per annum, with potential operating costs not specified ahead of a currently underway feasibility study.
The concentrate price paid after 2018 and 2019 will be based on prevailing market conditions.
Tawana reported that back in 2005 Buswill made a $30 million pre-payment to FMG for a five-year iron ore supply contract valued at $500 million – with the contract subsequently completed.
Under an existing agreement Tawana has with Bald Hill owner AMA, Tawana must spend $20 million this year on exploration and plant capital to earn a 50% interest in the project.
A condition precedent of the pre-payment is Tawana outlining a mineral resource of not less than 12 million tonnes grading at least 1.1% lithium oxide.
Tawana started 2017 with A$7 million cash.
Shares in Tawana last traded at 27c, capitalising the company at $103 million.
The stock was at levels of circa-10c at the start of February.
