WA Kaolin (ASX:WAK) has secured an offtake deal with a Chinese distributer that will represent 5% of the company’s total output from its Wickepin Project, post Stage 1 ramp up.
The 3-year deal, commencing in July 2022, will see up to 10,000 tonnes per annum of high-quality kaolin supplied to rubber and ceramics manufacturers in China.
Speaking on the deal, WA Kaolin CEO Andrew Sorensen said: “This is a fantastic result for WA Kaolin to sign such an agreement as we are nearing our commencement of production for Stage 1 at the Wickepin Kaolin Project. This Agreement alone represents 5% of the Stage 1 Output per annum of 200,000tpa. Coupling this with our existing agreements in place, means prior to commencing our production, we now have in place contracts covering 88% of our expected output for Stage 1.
“we now have in place contracts covering 88% of our expected output for Stage 1″
Having recently announced (ASX Announcement 9th February 2022) that we have secured funding to accelerate our Stage 2 development to increase production to 400,000tpa, it is truly a very exciting time for WA Kaolin and its shareholders as we transition into a major Kaolin producer.”
The company notes that pricing for the agreement will be negotiated on a quarterly basis via mutual negotiation and agreement, and will be ‘competitive’ to the world kaolin market.
WA Kaolin’s ‘extremely high grade’ Wickepin Kaolin Project is situated 220km south-east of Perth, and is described by the company as the world’s largest known remaining premium primary kaolin resource.
The project contains a JORC-2012 Inferred Mineral Resource of 644.5 million tonnes of ‘premium’ kaolinised granite, with the Ore Reserve in the mining tenement holding over 100 million tonnes of ‘extremely high grade’, easy access kaolin.
Importantly, output from the project is typically able to achieve premium prices due to its purity, quality and brightness.
The company has been gearing up for the launch of Stage 1 Production at its new processing plant at Wickepin, which will utilise proprietary ‘K99’ dry processing technology that was developed and tested at a pilot plant in Kwinana.
First production is expected to commence in Q2 CY22, with output commencing at a 25 tonne per hour nameplate capacity before increasing to around 200,000 tpa rate by December 2022, and increasing to 400,000 tpa in 2023.
Images: WA Kaolin Ltd