Australia’s Gippsland has entered into a letter of intent (LOI) with a major Asian group of companies in relation to the off-take of 500,000 pounds of tantalum pentoxide (Ta2O5) to be produced at the Company's 138 million ton Abu Dabbab/Nuweibi tantalum-tin-feldspar project located in Egypt.
The group is a major blue chip international industrial operation involved in the tantalum processing industry.
Pursuant to the LOI, Gippsland and the group will proceed to execute an off-take agreement for 100,000 pounds of Ta2O5 per annum for an initial period of five years commencing during 2005, which based upon the current tantalum market price is anticipated to produce revenue in excess of $17 million over the five year period.
The LOI is subject to a number of standard but material commercial conditions precedent including that the Abu Dabbab Ta2O5 specification must comply with that required by the Group which produces high-purity tantalum metal and tantalum derivatives used in manufacture of electronics, mill products and chemicals.
Under the LOI, the parties have the option to consider Gippsland undertaking down-stream processing to produce high purity Ta2O5 and/or any tantalum derivatives which the group may require from time to time.
The Abu Dabbab project is scheduled to commence operations during 2005 at a mill feed-rate of one million tons per annum, producing approximately 800,000 tons of ceramic grade feldspar and 400,000 pounds of Ta2O5 per annum.
The Directors have previously announced that 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 over a period of five years commencing at 250,000 tons during year one moving to 900,000 tons during year five. — (menareport.com)
© 2004 Mena Report (www.menareport.com)
