Spey Resource (CSE: SPEY) made a major announcement this morning, revealing that they have signed a lithium offtake agreement with an Australia-based firm. The offtake arrangement comes in the form of a letter of intent with Richlink Capital Pty Ltd.
Richlink Capital bills itself as an investment bank that services international institutions within the lithium markets. Founded in 2004 by Jason Zheng, the firm is said to have over 100 teams on industry specialists focused on four separate business lines, with over AUD$1.5 billion in funds under management.
The terms of the agreement outlines the potential for Spey to supply up to 20,000 tonnes of lithium chloride per year to two different clients of Richlink’s, which would come from the future production of Spey’s Incahuasi and Pocitos 2 salars in Argentina. Each client would commit to a minimum purchase of 10,000 tonnes per year on a free on board basis from Antofagasta, Chile. The purchase arrangements are believed to be at the then-current benchmark price of lithium chloride, which is currently US$80,375 per tonne.
READ: Spey Resources Successfully Extracts 99.5% Lithium Carbonate
“With our Incahuasi project adjacent to Ganfeng’s project, and Pocitos 2 drilling on track to commence this month, the LOI is another plank in our road to successfully developing our lithium projects. We are delighted to be working with Sam Zheng and George Su at the Richlink office in Australia and their lithium buyer clients. Our drillers, logistics and legal teams have prepared for our next phase of development operations to commence in Argentina,” commented VP of Corporate Finance Nader Vatanchi.
The arrangement will be subject to the completion of due diligence, as well as the board of directors approving the transaction, the execution of a definitive agreement, any required regulatory approvals, and no material adverse changes occurring between either party.
Spey Resources last traded at $0.235 on the CSE.
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