Centaurus secures 100% Jaguar nickel production offtake with Glencore, CNGR
ASX-listed nickel producer Centaurus Metals has signed two new binding offtake agreements with diversified miner and trader Glencore and Chinese precursor cathode active material manufacturer CNGR Advanced Material to supply 100000 dry metric tonnes of high-grade nickel concentrate from the Jaguar mine over a five-year contract period to each company.
Together with Centaurus' existing offtake agreement with Glencore, the two new contracts take the nickel concentrate from Jaguar under contract to 100% of production over the first five years of operations, with this production equating to 22 500 t/y of nickel.
Any additional volume produced and made available for sale by Centaurus over and above the minimum 40000 t/y of concentrate under these two new offtake agreements, and the 20000 t/y already contracted to Glencore in a prior agreement, will also be purchased by the parties, with parcels alternating between CNGR and Glencore.
Pricing under the contracts will be referenced to the London Metal Exchange Cash Settlement nickel price, while payables have been agreed for copper and cobalt byproducts contained in the nickel concentrate. The estimated net sales value of the material covered by the new offtake agreements is about $900-million over the life of the five-year contracts.
Both offtakers have also each agreed to make a $20-million strategic investment in Centaurus to support development of the Jaguar project, which is based in Brazil.
Centaurus says the combined $40-million of funding provides Centaurus with considerable momentum as it finalises the senior debt funding process for the Jaguar project. This, in turn, will allow Centaurus to complete the overall project funding package and derisk the pathway to a final investment decision.
"The signing of these two new offtake and subscription agreements with global leaders in their respective fields of downstream nickel processing represents a major validation of the Jaguar project and its credentials as one of the world’s most significant new sources of high-quality, low-cost nickel sulphide concentrate for global markets," says Centaurus MD Darren Gordon.
