Glencore has bought into KGL Resources’ Jervois copper project in the Northern Territory after signing an initial five-year offtake agreement with the emerging miner.
The evergreen contract will enable Glencore to source copper concentrate from Jervois to be delivered to its Mount Isa copper smelter.
The concentrate sale price is volume-based and calculated in reference to the London Metal Exchange cash settlement price for copper, with silver and gold credits. The price is subject to various adjustments pertaining to penalties, treatment and other measures.
For the contract to go ahead, finance for Jervois must be secured by no later than September 30, 2025, or commercial production by no later than December 31, 2025.
KGL aims to finalise its Jervois feasibility study by mid-2022 and achieve a final investment decision this year. The company also aims to commence early development works at Jervois in 2022.
“The execution of the binding offtake agreement with Glencore is a major milestone for KGL and the Jervois project,” KGL managing director Simon Finniss said.
“It brings certainty to the sales program and Glencore is a well-credentialed and bankable counterparty. Having benchmarked pricing in this strong commodity environment is comforting.
“Work is continuing on the feasibility study which will incorporate the terms of this agreement, as well as the new resource data from the Bellbird, Reward and Rockface deposits. We expect this will result in favourable annual production and mine life outcomes.”
It comes after Glencore bought into Austral Resources’ Anthill project in Queensland in early February, where the company can acquire up to 40,000 tonnes of copper cathode from the mine.
The 10,000-tonne-per-annum project is expected to commence copper production by mid-2022 across an initial four-year period.
The agreement also sees Glencore provide a $21-million prepayment facility for Austral, enabling the emerging miner to accelerate exploration and development activities throughout 2022.