Copper Offtake Agreement


    Marna Cloete, President and Chief Financial Officer of Ivanhoe Mines, said, “The agreements reflect the excellent partnership we have with CITIC Metal and Zijin, and the initial payment capabilities significantly reduce the working capital requirements of the mine as production increases in the first phase.” Sampling agreements are essential for many mining companies, especially those focused on critical and industrial metals. Here`s why. The two companies will purchase the copper concentrate in the Kakula mine and the blister copper in the Lualaba copper smelter on a free-to-back basis. The mine is an underground open-pit copper, gold and silver mine located in central Yukon, approximately 240 kilometres north of the capital Whitehorse along the Klondike Highway. Minto has been in continuous production since 2007 and is currently the only operating mine in the Yukon region. OceanaGold (TSE: OGC) (ASX: OGC) confirmed on Friday that it had entered into a kidnapping agreement with commodity trader Trafigura regarding the sale and purchase of copper concentrate from the Didipio project in northern Luzon, Philippines. In 2017, the open-pit mine produced 16,332 tonnes of copper, 170,809 ounces of silver and 25,205 ounces of gold. A removal agreement is essentially a binding contract between a company that produces a particular resource and a company that has to purchase that resource. It formalizes the buyer`s intention to buy a certain amount of the producer`s future production. CITIC Metal and Chinese company Zijin Mining have signed removal agreements with kamoa Copper Joint Venture (JV) for the Kamoa Kakula mine in the Democratic Republic of Congo (DRC). The Kamoa-Kakula copper project, operated by Kamoa Copper, went into production last month. An annual production of more than 800,000 tons is estimated. Removal agreements are important for many companies, but especially important for those that focus on critical and industrial metals.

    Many of these metals are not sold on the open market, making it more difficult for producers to sell them. The smelter is expected to process up to 150,000 tonnes of copper concentrates from the Kamoa Kakula mine. In June 2011, OceanaGold began construction of the Didipio high-grade gold copper project. The company said the project is expected to be commissioned in the fourth quarter of 2012. Of course, this type of contract can also be beneficial for buyers. Removal agreements allow buyers to buy metal production at a certain market price. This can serve as a hedge against future price changes when demand outweighs supply. The terms of a pickup agreement also ensure that buyers will receive the tons of products they purchase at any given time. The Kamoa-Kakula mine will have an annual copper production of more than 800,000 tons. Under the $30 million deal, 125,000 tonnes of copper concentrate produced at the mine will be sold and exported to a designated Japanese port. The international company was not disclosed.

    Typically, withdrawal agreements are negotiated after the completion of a feasibility study and prior to mine construction. They help reassure producers that there is a market for the material they want to produce. This is beneficial for a number of reasons – most obviously, it means that the mining company doesn`t have to worry about being able to sell its metal. Didipio is the subject of a financial and technical assistance agreement. Based on the most recent NI 43-101 technical report from July 2011, OceanaGold stated that the mine design projects an average annual production of approximately 100,000 ounces of gold and 14,000 tons of copper concentrate over an expected mine life of 16 years. Cloete said: “We are also pleased to enter into a long-term toll agreement with the local Lualaba copper smelter, which is in line with our processing commitment in the country, which includes Kamoa Copper`s longer-term plan to build its own direct blister smelter. The company said OceanaGold will sell 100% of Didipio`s copper and gold concentrate production to Trafigura on competitive terms, including processing and refining costs, in accordance with the main terms of the agreements. While removal agreements have many benefits for producers and buyers, it is important to note that they also carry risks. In addition, a removal agreement tends to facilitate financing by producers to obtain a project through the construction of a mine. A lender or investor is more likely to finance a project if they are convinced that companies are already lining up to buy the tons of metal they will produce. Under the terms of the agreements, CITIC Metal and Gold Mountains (HK), Zijin`s subsidiary, International Mining Company, will each acquire 50% of the copper production from the first phase of the Kamoa Kakula mine. Buyers also sometimes provide money to producers to advance their mining projects when a removal agreement is reached.

    However, this is not always the case. The purchase is for 100% of the copper concentrate produced at the Minto mine, which will be supplied on a cost, insurance and freight basis, and is expected to remain in place until the delivery of 125,000 tonnes of copper concentrate or until December 31, 2021. Still confused? Here`s a simple breakdown of how the removal agreements work: Pembridge Resources announced in a statement this week that it has entered into a removal funding agreement for its Minto mine. Last month, Kamoa Copper signed an agreement to process certain quantities of Kamoa`s copper concentrate production at the Lualaba copper smelter. Piper Alderman acted as legal counsel to red river in the negotiation and conclusion of its first lead, zinc and copper removal agreements and the additional initial agreement with Trafigura Pte Ltd. to support the restart of the Thalanga Base Metal Mine in Red River in North Queensland. “Securing this agreement with such a large and sophisticated mining investor is a confirmation of both the great potential we see in the Minto mine and our vision to grow Pembridge with the Minto mine as a platform,” said David Linsley, CEO of Pembridge. The risks associated with resource extraction are high. One way exploration companies can reduce these risks is to enter into removal agreements. But what are they and how do they work? “We have all the necessary permits and we will start exporting clean copper and hydroelectric products from the Kamoa-Kakula mine to meet the growing international demand for electrification of the global economy. The Asia-Pacific gold producer said the abduction deal is specified in the “heads of agreement” signed by the two companies and announced in July and will follow the same terms. An acquisition vehicle that turned to copper production signed a removal agreement with a large international company, consolidating its new status as a producer.