WA Kaolin (ASX:WAK) has secured a 3 year offtake agreement with a Vietnamese ceramic and paint market distributor for output from its Wickepin project in Western Australia.
The deal, which covers up to 13,500 tonnes of ‘high-purity’ kaolin over the multi-year term, sees the company secure offtake and LOI agreements for a total of 90% of planned 200,000tpa Stage 1 output from its new processing plant.
Speaking on the news, WA Kaolin CEO Andrew Sorensen said: “This is excellent news for WA Kaolin and builds further momentum as we near commencement of production for Stage 1 at the Wickepin Kaolin Project.
“Combining this with previous offtake agreements and LOI’s announced, we have now secured contracts covering 90% of our expected Stage 1 output”
As we near the Stage 1 production milestone, WA Kaolin is also well placed for expansion with funding to accelerate certain elements of Stage 2 development to increase production to 400,000tpa secured. We are now incredibly close to becoming a significant kaolin producer on the world stage in a strengthening global market environment for the resource.”
The agreement, which comes into effect in July 2022, will see WAK supply a targeted 4,500tpa, with a minimum volume of 2,500tpa. The company notes that pricing will be competitive to the world kaolin market, delivered on a cost and freight basis, and will be negotiated on a quarterly basis.
In early March the company had announced a separate 10,000tpa kaolin offtake deal with a major Chinese supplier to the rubber and ceramics industries.
Construction work at Wickepin’s new processing plantThe Wickepin Project, located 220km south-east of Perth, is home to the world’s largest known remaining premium primary kaolin resource. This ‘world-class’ resource is noted for its purity, quality, and brightness, and has been commanding ‘premium’ prices from a list of global customers.
The project sits on a JORC-2012 current inferred Mineral Resource of 644.5 million tonnes of kaolinised granite, with the Ore Reserve in the mining tenement holding over 100 million tonnes of ‘extremely high grade’, easy-access kaolin.
Construction at the project’s new processing plant, which will utilise the proprietary ‘K99’ technology, is on track with installation of all equipment and infrastructure now complete, and production expected to commence in June 2022.
Images: WA Kaolin Ltd
