Variscan Mines (ASX:VAR) has entered into an exclusive marketing agreement with Square Trading Singapore for the future sale of zinc and lead concentrate from the Novales-Udias and Guajaraz projects in Spain.
Under the agreement, which has a five year term, both parties will negotiate and agree to a competitive, commercial marketing fee, immediately following Variscan announcing the results of a mine restart study.
Square Trading’s services will include developing and updating marketing strategies, preparing and providing short and long-term marketing plans, introducing Variscan to customers, liaising with customers in respect of sales contracts, as well as assisting in preparing technical and commercial presentations to customers in respect of the products.
Variscan adds that Square Trading will also use their endeavours to assist with procuring financing for the company to construct and operate the project so as to enable the delivery of products from the company to customers.
CEO Stewart Dickson says the company is continuing to progress one of the “highest grade”, development-stage zinc deposits in Europe towards restarting production.
“Looking ahead, we need to consider how we best access markets with our intended zinc and lead concentrates,” Dickson says.
“The marketing agreement allows Variscan to focus on progressing towards production knowing it has a marketing partner who is aligned with the company and its shareholders by virtue of its co-ownership of the company’s largest shareholder, Zinc GroupCo.
“Zinc is a metal vital to the energy transition having been recognised as a critical mineral by the US and Canadian governments and as a strategic mineral by the Australian Government.”
The company will continue to advance its Novales-Udias Project through its current underground drilling program. An updated resource estimate and the release of a mine restart study is expected in the second half of this year.
Dickson adds that as the European Union expedites its drive to reduce import dependency for critical minerals, the company believes it will have desirable concentrate products.
Square Trading Executive Chairman Staffan Ever says the agreement represents a step towards leveraging Square’s extensive marketing and trading expertise to maximise market access for the company’s zinc projects.
“Zinc plays an increasingly critical role in the energy transition and perfectly fits in our strategy to diversify into future-facing commodities,” Ever says.
“Moreover, we strongly believe this partnership can help Variscan to progress the projects towards production, knowing that they have a committed and experienced marketing partner.
“We are dedicated to supporting Variscan in advancing and maximising value from their projects through our robust partnership including our investment via Zinc GroupCo further aligning us for joint success.”
Square Resources, of which Square Trading is subsidiary of, is a shareholder in Zinc GroupCo. Square is active across the raw material supply chain from exploration, mining, sales, to marketing and trading.
Variscan Mines is a nature resources company focused on acquiring, developing, and exploring high-quality strategic mineral projects. The company has compiled a portfolio of base metal interests in Spain, Chile, and Australia.
Write to Aaliyah Rogan at Mining.com.au
Images: Variscan Mines
