Metallica Minerals (ASX:MLM) subsidiary Cape Flattery Silica (CFS) has inked a new memorandum of understanding (MoU) with Shenzhen Investment Holdings’ subsidiary Eternal Asia Supply Chain Management (EA) (SHE:002183).
Under the MoU, CFS will provide samples of processed high-purity silica sand from the Cape Flattery Silica Sand Project in Queensland for testing by EA to assess its suitability for further processing and value-adding using EA’s proprietary technology.
Metallica, which has a $23.99 million market capitalisation, reports that if successful, the parties will engage in commercial discussions based on sharing the value improvement from the further processing of the silica sand before entering into a heads of agreement (HOA).
The company notes the HOA would be applicable for the silica sand products that CFS will produce from the project and is expected to form the basis of a long-term binding sales contract.
The MoU is non-binding and is valid for 12 months.
Metallica Minerals Executive Chairman Theo Psaros says: “The MoU with Eternal Asia is a great outcome for both parties.
For CFS, it provides an opportunity to move our already high-purity silica sand into a non-glass market segment with a higher value, through further processing using EA’s technology. For EA, they obtain a secure supply of high-purity silica sand once our project is in production.”
“The MoU with Eternal Asia is a great outcome for both parties”
The MoU follows the start of a reverse circulation (RC) drilling program at the Leo Grande Graphite Gold Project (LGGP) within the Clermont tenement in Queensland, as reported yesterday.
Eternal Asia represents China’s first listed supply chain company with nearly 10,000 employees and a multi-regional global network that extends to more than 320 cities across China alone.
The company is a subsidiary of Fortune 500 company Shenzhen Investment Holdings.
Metallica Minerals is an Australian developer focused on delivering high-purity silica sand to a diversified global customer base.
As of 30 September, Metallica Minerals had $5.67 million cash and cash equivalents at hand, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: Metallica Minerals
