In November 2017 Millungera Energy Minerals (MEM), as a subsidiary of Greentech Minerals, entered into a Long Term Off-Take Agreement with Jiangsu Yangshan Silicon Material Technology Co Ltd (JYSMT) for a term of 5 years from the first shipment of HPQ.
Under the Offtake Agreement:
- MEM is required to:
- sell a minimum of 5,000 tonnes of Product per annum to the Buyer;
- determine the price for the first shipment;
- pay for the insurance and freight of the Product (CIF) to Lianyungang Port, China.
- deliver the Product to Lianyungang Port, China
- JYSMT is required to:
- provide, prior to the first shipment, to MEM an unrestricted, irrevocable letter of credit valid for a period of 6 years for a sum required by the MEM in writing, acting reasonably having regard to its financial exposure under the Offtake Agreement;
- pay all fees in relation to the letter of credit and any reinstatement should the letter of credit be drawn upon;
- determine the buy price for all shipments after the first shipment;
- pay all taxes and duties arising from the sale, export, import and transport of the product
- reimburse MEM for the costs of freight and insurance of the product from the point of origin to Lianyungang Port in China.
Due to COVID-19 restrictions, the Company has been delayed in production and as such, the first shipment has not occurred. A letter was received from JYSMT indicating the First Shipment is to be completed no later than the end of 2023, failing which, the parties will need to renegotiate or extend the Off-Take Agreement.