The demand for copper concentrate set to be produced by Generation Mining (TSX: GENM) at their Maraton Palladium-Copper project in Ontario appears to be high. The firm this morning indicated it has entered an offtake agreement with Glencore International for the concentrate, while signing a term sheet with a separate party for the balance of concentrate produced at the mine.
Under a finalized offtake term sheet, Glencore has agreed to purchase 50% of the total concentrate produced at the Marathon project, which will be treated in Quebec by Glencore. The term sheet is said to outline specifications for the concentrate, which Generation expects to meet without penalty based on current metallurgy results.
At the same time, an offtake term sheet is said to have been entered into with a “European integrated copper group,” whom will purchase the balance of concentrate produced at Marathon. That agreement is also said to underpin certain loan guarantees needed for the company to obtain construction financing for the development of the project.
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Concentrate pricing was not provided for either term sheet, although the arrangement with Glencore is said to include “attractive” metal pricing terms, as well as credit support for environmental reclamation financial surety requirements.
The concentrate itself is said to contain copper, palladium, platinum, gold, and silver, with the mine estimated to produce 87,000 tonnes of the concentrate annually. The project in November received approval from both the provincial and federal governments to proceed with the development of the mine after issuing environmental assessment approvals. The development of the mine is currently still in the pre-construction phase.
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Both term sheets are said to be subject to final documentation and customary approvals. Once project financing is finalized Generation expects to enter binding offtake arrangements for the entirety of its expected production.
Generation Mining last traded at $0.53 on the TSX.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
