ELE) Reaches Offtake Deal for Newly Acquired Peko Project – The Market Herald

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  • Elmore (ELE), through its subsidiary Peko, signs an ore sales agreement with Royal Advance of Hong Kong for magnetite from the recently purchased Peko project in the NT
  • According to Elmore, Royal Advance wants to buy all the product produced during the life of the mine
  • However, the parties have decided to take a conservative approach and the initial purchase agreement will cover the first two shipments with the possibility of extending up to 12 months.
  • Early production at Peko averages 66% iron, and Elmore says he hopes his relationship with Royal Advance will extend beyond magnetite to other minerals.
  • ELE shares rose 6% and trade at 3.5 cents at 2:01 p.m. AEST

Elmore’s (ELE) subsidiary, Peko, has entered into an ore sales agreement with Hong Kong-based Royal Advance to ship high-grade iron magnetite concentrate to China.

The kidnapping deal comes just days after Elmore bought the Peko iron project in the Northern Territory.

The average content of the product to date is around 66% iron, although Elmore said he expects the content could be increased to 67%. This premium iron concentrate sells for a significantly higher price than the average iron ore price.

The sale price on the offtake deal, however, will be based on the PLATTS 65% Iron Index, minus 1%.

All higher grades of iron will also sell for the higher equivalent price.

Elmore said while Royal Advance was interested in taking all ore produced over the life of the mine, the two companies were taking a ‘conservative approach’ until production and product quality were better. established.

As such, the current off-take agreement will cover the first two shipments of the project, and Peko has the option to extend it for up to 12 months.

Payments for the ore will be made in three instalments. The first 40% will be received once 7,500 tonnes of product has been stored at the Port of Darwin. Then 55% will be received once the product is loaded onto a vessel. The final 5% will be received once the product quality is confirmed after shipment.

Elmore said it produced “more product than needed” for the initial storage phase at the Port of Darwin. However, the lack of shipping containers has slowed the movement of product to Darwin.

Additional containers have now been found and are heading Queensland to the project.

Shares of ELE rose 6% and were trading at 3.5 cents at 2:01 p.m. AEST.

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