Australia’s Gippsland has entered into a Heads of Agreement with a major European group of companies for the off-take of 2.65 million tons of micronized ceramic grade feldspar to be produced at the Company's 40 million ton Abu Dabbab tantalum-feldspar project located in Egypt.
The group is a major blue chip international industrial operation involved in the feldspar industry having annual revenue in excess of $400 million. Under the five year agreement, the Group's feldspar off-take will commence at 250,000 tons during 2005 increasing to 900,000 tons during 2009.
Based upon current market prices for feldspar, the agreement is scheduled to generate sales revenue in excess of $80 million over the five-year period. The agreement provides the group with the option to increase feldspar off-take tonnages during the five-year period.
The agreement is non-exclusive and only pertains to the Italian market. The off-take agreement is subject to a number of standard but material commercial conditions precedent such as that the Abu Dabbab feldspar specification must comply with the requirements of the Italian ceramic industry. As previously announced however,
extensive in-plant testwork undertaken in Italian ceramic tile factories has confirmed that the Abu Dabbab feldspar is eminently suitable for this purpose.
The Abu Dabbab project is scheduled to commence operations during 2005 at a feed-rate of one million tons per annum producing approximately 800,000 tons of ceramic grade feldspar and 400,000 pounds of tantalum pentoxide per annum.
The company had previously announced that consideration will be given to increasing mill feed rate to two million tons per annum not long after commencement of operations.
The Abu Dabbab project is the subject of a 50:50 joint venture agreement between Gippsland and the Egyptian Geological Survey & Mining Authority, a state agency
of the Egyptian Government.
Gippsland is continuing to evaluate the feldspar markets in Spain, Portugal, France, Germany, South East Asia and the Middle East, which have a combined market potential
in excess of three million tons of ceramic grade feldspar per annum. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
