New Century Resources has
executed the first long-term offtake agreement for zinc concentrate
produced at the Century zinc mine in Queensland.
The Perth-based company is on
track to restart the historic mine later this year, more than two
years after it was officially shut due to low zinc prices by previous
New Century expects the
Century mine to be one of the world’s top 10 producers of zinc once
operations are ramped up.
The offtake agreements, with
Mercuria Energy Trading and Transamine Trading SA, reflect the strong
zinc market fundamentals and current scarcity in global supply of
large tonnage zinc concentrate offtake available, according to the
New Century launched a tender
for 1.5 million tonnes (Mt) of zinc concentrate over the first 3.5
years of production during the December 2017 quarter. The offtake
agreements with Mercuria and Transamine cover around half of this
Patrick Walta, New Century
managing director, said the execution of these initial offtake
agreements represented another milestone for the company as its
progressed towards production in the third quarter 2018.
“New Century is very pleased
with the strong demand shown by smelters and commodity traders in its
tender process, which is a clear demonstration of the quality of New
Century’s concentrate and the current strong fundamentals of the zinc
market,” Walta said.
“The company looks forward to
building a long-term successful relationship with its new partners at
Mercuria and Transamine. We also look forward to finalising the
development of other offtakes with shortlisted parties.”
New Century added it was
progressing discussions with other potential buyers of zinc
concentrate from the Century mine.
Meanwhile, New Century has
received a request for arbitration concerning a claim by Nyrstar Sales
and Marketing regarding the purchase of zinc concentrate from the mine
under historical commercial agreements.
The company understands the
agreements were executed in 2007, but were also terminated “some time
ago and prior to the company acquisition of the mine” in 2016.
“New Century was not aware of
the existence of any such agreements with Nyrstar when it acquired its
interest in the Century zinc mine and copies of these agreements were
not provided to the company at the time of the acquisition,” New
Century said in an ASX statement.
“The company will vigorously
defend the claim and the arbitration does not prevent New Century from
signing or performing its obligations under any new offtake