Singapore-listed Alliance Mineral Assets is on the verge of becoming the fourth lithium producer in Australia. Its mine, known as Bald Hill, is sited in Western Australia.

Alliance and its JV partner, Tawana Resources, have signed an offtake agreement to sell -- for about US$200 million -- at least 200,000 tonnes of high-grade lithium concentrate at a fixed price to Hong Kong-listed Burwill Holdings.

Australian research house Cannacord Genuity has just produced a report on both companies. Excerpts: 


camp5.17This camp will house up to 150 men who will construct infrastructure for mining lithium concentrate at Bald Hill.
Photo: Company
Bald Hill JV partners Tawana Resources and Alliance Mineral Assets achieved a major milestone recently with the securing of product offtake and prepayment, which combined with a recent capital raising now sees the project effectively funded through development.

With further de-risking of the project expected with the imminent maiden resource (including expected subsequent upgrades by mid’17) and feasibility study, Bald Hill’s key appeals will become more apparent – low capex start up, short lead time to production, good exploration upside and potential for a considerable mine life.

Strong pricing

Reg Spencer“Pricing achieved under the offtake agreement is very strong, and places it at the upper end of current market price ranges. Furthermore, such pricing suggests the potential for strong operating cashflow - our estimated operating costs of A$484/t product could support project level EBITDA (100% basis) of +A$120m over Years 1 and 2 of production.”

-- Reg Spencer (photo),
Analyst,
Canaccord Genuity


Offtake Agreement – strong pricing underpins solid operating margins

• Bald Hill Joint Venture partners (TAW and AMAL) recently announced that they have executed a binding offtake agreement for planned spodumene production from Bald Hill, with Hong Kong Stock Exchange listed Burwill Holdings Ltd.

The key terms of the 
agreement include:
− Initial 5 year term
− Exclusive rights to all planned spodumene concentrate production
− Fixed price of US$880/t (FOB Esperance) for 6% Li2O product from Mar’18 to Dec’19 (price adjustment of +/- US$15/t for each +/- 0.1% Li2O increment/decrement in grade with a min. of 5.5% Li2O)
− Price and volumes for subsequent to be negotiated and agreed based on prevailing market conditions

 

"Extremely bright future"

tjandra pramoko4.17"I believe the future is extremely bright for our company. Someone has already committed to pay US$200m for our product; that's even bigger than our market cap."

- Tjandra Pramoko, 
CEO of Alliance Mineral Assets
(market cap: S$144 million)
(NextInsight file photo)

 


Share Prices

Counter NameLastChange
AEM Holdings3.2200.150
Alliance Mineral0.345-
AusGroup0.0370.001
Avi-Tech Electronics0.4650.005
Best World Int.1.340-
China Sunsine0.895-0.005
CWG International0.151-
DISA Limited0.0150.001
Dutech Holdings0.3450.005
Federal Int. (2000)0.400-
Food Empire0.640-0.015
Geo Energy0.250-0.005
Golden Energy0.3850.005
GSS Energy0.163-0.002
Heeton Holdings0.5650.005
ISOTeam0.340-
KSH Holdings0.780-
Lian Beng Group0.7100.005
Miyoshi0.074-0.001
Nordic Group0.5550.010
Oxley Holdings0.6350.015
REX International0.053-0.001
Riverstone1.0400.010
Roxy-Pacific0.540-0.005
Serial System0.165-
Sing Holdings0.450-
Sino Grandness0.199-0.006
Straco Corp.0.8350.015
Sunningdale Tech1.8500.010
Sunpower Group0.510-
The Trendlines0.147-0.001
Tiong Seng0.3850.005
Trek 2000 Int.0.280-
Uni-Asia Group1.230-
XMH Holdings0.240-
Yangzijiang Shipbldg1.510-0.010

NextInsight RSS

rss_2 NextInsight - Latest News

Online Now

We have 904 guests and no members online