Hastings Technology Metals (ASX:HAS) and Baotou Sky Rock Rare Earth New Material Co. have entered into a binding term sheet providing for an integrated tolling and offtake arrangement for rare earth concentrate.
Hastings says the arrangement will help support improved economics for stage one of its 100% owned Yangibana Rare Earths Project in Western Australia.
Under the arrangement, Hastings, which has a $74.38 million market capitalisation, will receive payment for rare earth oxides based on a 15-day average market pricing for neodymium (Nd), praseodymium (Pr), dysprosium (Dy), and terbium (Tb).
Hastings says the pricing structure applies to a minimum of 10,000 tonnes per annum (tpa) of concentrate for a 7-year term starting once the term sheet is executed. Hastings can elect to extend the option for another 5-years following.
Chief Executive Officer (CEO) Paul Brown says the company has continued to evaluate ways to de-risk and optimise stage one of Yangibana. As part of that it has identified the opportunity to use excess downstream rare earth processing capacity available in China by teaming up with privately held rare earth processing and magnet manufacturers.
“The integrated arrangement under the binding term sheet with Baotou Sky Rock will facilitate Hastings extracting greater value from our concentrate under a multi-stage toll treatment arrangement and combined with our optimised mine plan delivers a more attractive project.
The ability to secure this innovative tolling and offtake arrangement demonstrates the strong demand for the Yangibana Project’s NdPr-rich concentrates and gives us confidence in the outlook.”
Hastings says the integrated arrangement with Baotou supplements the company’s existing offtake contract with ThyssenKrupp Materials Trading for two-thirds of annual production from Yangibana.
Negotiations are currently ongoing with other potential customers to conclude similar offtake arrangements for the remaining Yangibana project volumes within the offtake contract with ThyssenKrupp.
The integrated arrangement and resulting improved economics and updated financial model are being used to support the project funding process, which is now in an advanced stage of detailed due diligence.
Hastings Technology Metals is a Perth-based rare earths company focused on developing its Yangibana project in the Gascoyne region of Western Australia.
As of 31 December 2023, the company had $42.167 million cash and cash equivalents at hand, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: Hastings Technology Metals
