Boron One Holdings Inc. [TSXV:BONE] has announced a second binding offtake agreement with a Singapore-based global distribution company for the future sale of boron mineral concentrates and derivative products. The three-year arrangement remains subject to conditions precedent, including completion of the Company’s planned mining and processing facilities and receipt of the permits, licenses and regulatory approvals needed to begin commercial production and operations.
#Products and annual commitments
The agreement covers Ulexite concentrate, Colemanite concentrate, Boric Acid and Borax (5 mol). The stated annual purchase commitment is 150,000 (min) to 200,000 (max) tons of product, with the product-level terms set out as follows:
- 50,000 tons of Ulexite concentrate per year, with an option to increase purchases to 60,000 tons per year;
- Up to 20,000 tons of Colemanite concentrate per year, with no minimum purchase commitment;
- 50,000 tons of Boric Acid per year, with an option to increase purchases to 60,000 tons per year; and
- 50,000 tons of Borax (5 mol) per year, with an option to increase purchases to 60,000 tons per year.
The Purchase Commitment is binding on the Buyer, subject to the terms and conditions of the Agreement. Boron One also retains the right, at its sole discretion, to elect not to supply some or all of the agreed quantities of Boric Acid and/or Borax.
#Pricing and payment provisions
Pricing will be linked to prevailing market prices and adjusted annually. The agreement includes a minimum floor price formula and take-or-pay provisions requiring the Buyer to make specified payments for certain annual purchase shortfalls.
The contract term will begin when Boron One’s production facilities become fully operational. The Buyer has received a non-exclusive right to market and sell the Products to customers in certain Asian countries.
#Conditions and project development
The Agreement remains subject to the satisfaction of certain conditions precedent. These include completion of Boron One’s planned mining and processing facilities and receipt of all permits, licenses and regulatory approvals necessary to commence commercial production and operations. Further terms and conditions of the Agreement also apply.
Boron One President Tim Daniels said the company views the arrangement as its second offtake agreement and said the commitments cover a substantial portion of its anticipated production. He also said the company considers customer demand relevant to its efforts to attract strategic partners and secure project financing.
#Buyer and company background
The Buyer is described as a Singapore-based global distribution company with an established history in boron product sales and customer service. Its activities include wholesale distribution of industrial chemicals and chemical fertilizers, as well as the sale of boron products into Southeast Asian markets.
Headquartered in Victoria, B.C., Canada, Boron One is focused on the responsible development of its boron assets. The company says boron is used in agriculture, energy storage, fiberglass, ceramics, detergents and advanced materials. Its shares trade on the TSX Venture Exchange under the symbol “BONE”.
#Risks and forward-looking information
Boron One identifies uncertainties related to permitting, financing, construction, development, commodity prices, operating costs, market conditions, regulatory approvals and the ability of the parties to perform their obligations under the Agreement. The company cautions that actual results may differ materially from its forward-looking statements and says it has no obligation to update them except where required by applicable securities laws.
#Key Takeaways
- Boron One has announced a second binding three-year offtake agreement with a Singapore-based global distribution company.
- The agreement covers Ulexite concentrate, Colemanite concentrate, Boric Acid and Borax (5 mol).
- Pricing is market-linked, includes a minimum floor price formula and contains take-or-pay provisions for certain purchase shortfalls.
- The Buyer’s Purchase Commitment is binding subject to the Agreement, while Boron One may elect not to supply some or all of the agreed Boric Acid and/or Borax quantities.
- The arrangement remains subject to facility completion and the required permits, licenses and regulatory approvals.
Original source: Read original article