Suvo Strategic Minerals Limited (ASX: SUV) has entered into a non-binding Cooperation Agreement with C&D Logistics Group Co Ltd, a subsidiary of Xiamen C&D, with the potential supply of Kaolin from Suvo’s Gabbin project in Western Australia under discussion.
C&D focuses on resources and minerals providing a one stop shop supply chain service to both upstream and downstream users of the industrial supply chain.
The Agreement was signed after Suvo sent technical data sheets (TDS) to C&D from its 100%-owned Pittong hydrous kaolin operation in Victoria for further evaluation.
Following evaluation, the companies entered into the Agreement, which will see Suvo and C&D work together to develop and grow specific kaolin product markets, with a view to developing long-term relationships with downstream customers in a range of industries, products and locations.
Under the Agreement, Suvo and C&D will seek to negotiate a Sales and Purchase Agreement in good faith, with a target minimum offtake of 80,000tpa of hydrous calcined kaolin.
The products delivered under any offtake agreement could be produced from the Company’s existing Pittong operation and/or other kaolin projects.
Under the Agreement, C&D has also requested Suvo to provide 12 additional product samples of hydrous clay from its Pittong operations for further evaluation. Pending the outcome of this evaluation, Suvo and C&D could negotiate further offtake agreements for other kaolin related products that meet the buyer’s specifications.
Suvo and C&D will continue to negotiate in good faith to enter any further contracts. This Agreement marks another milestone in the company’s ongoing work to scale up Pittong operations, where an expansion project is underway to more than double its current plant capacity to ~60,000tpa through the installation of new press decks and automated equipment.
Suvo is progressing work at its Gabbin kaolin deposit, located 215km north-east of Perth, Western Australia, where the company recently produced a bulk sample of High Reactivity Metakaolin.
The right to negotiate under the Agreement expires on 1 May 2023, however, the Agreement can be renewed by mutual agreement.
“This Cooperation Agreement with C&D marks a significant milestone in supporting Suvo’s strategic growth plan,” Suvo Non-Executive, Chairman Henk, said.
“The Agreement helps underpin the expansion works currently taking place at our Pittong operation, with the potential to lead to a minimum offtake of 80,000tpa of hydrous calcined kaolin. The investment we are making in our Pittong expansion reflects the surging demand being seen globally for high quality kaolin products.
“The agreement also comes after the recent successful bulk sample production of High Reactivity Metakaolin from our Gabbin deposit, which allows us to carry out meaningful discussions with potential global partners, such as C&D.
“In addition to enhancing production, Suvo also remains focused on achieving better ESG outcomes, which will be realised through more energy efficient operations, rehabilitation practices and producing metakaolin products to help decarbonise the cement and concrete industries.”
For further information please visit: https://suvo.com.au/
