Suvo Strategic Minerals (ASX:SUV) has extended a major take or pay offtake agreement with Chaozhou Chengcheng Industrial for the supply of hydrous kaolin from the Pittong operations until 2030.
The agreement, valued at $6.56 million, covers a minimum order quantity of 8,750 tonnes of hydrous kaolin over the five-year period. The previous three-year deal covered 4,275 tonnes of hydrous kaolin.
Executive Chairman Aaron Banks says as a result of winning new business, with Suvo’s local distribution partner Chengcheng, the company is able to increase the annual minimum order quantities in the agreement by 25%.
“The increase in demand from one of our major customers just last month and now another positive step forward with this agreement, we anticipate significant growth in sales volumes in 2025,” Banks says.
“Furthermore, we anticipate further positive growth at the Pittong operations, which reported positive EBITDA and net profit, at project level, of $510,000 and $390,000 last quarter.”
Suvo Strategic Minerals, which has a market capitalisation of $33.31 million, is continuing to work on other product development opportunities as it grows the sale of kaolin from its Pittong operations.
The Pittong operation comprises the Lal Lal and Trawalla Kaolin deposits which are located near Ballarat, Victoria.
Lal Lal is used to supplement with a higher brightness ore for specialist applications such as pharmaceuticals and cosmetics. Meanwhile, Trawalla, covering 236 hectares, has an approved work plan, land access agreement and is mining ready.
Kaolin is used in ceramics, medicine, coated paper, and is also used in food additives, toothpaste, and light diffusing materials.
Write to Aaliyah Rogan at Mining.com.au
Images: Suvo Strategic Minerals
