Platina Resources (ASX:PGM) shares have more than quadrupled in a week to an intra-day high of $0.25 today following Monday's announcement of an offtake deal for its Owendale scandium project in New South Wales.
Shares last traded at $0.22.
Platina signed a Heads of Agreement with Chinese manufacturer, Inner Mongolia Honfine Zirconium Industry Co (Honfine), to negotiate both an Off-take Agreement and a Supply, Technology, Processing and Marketing Agreement.
Platina and Honfine will negotiate an off-take agreement for the supply of 15 tonnes of scandium oxide at a 99.9% purity grade and at a commercially acceptable price.
Whilst pricing and other terms are yet to be agreed, over the past four years scandium oxide at 99.9% purity has sold within a range of USD$1,400-3,700 per kilogram.
The stated intention is that Platina and Honfine will aim to finalise and execute binding agreements within the next three months.
In addition, both companies will evaluate the viability of transporting scandium concentrates grading 1000ppm scandium or higher from Australia to China to be processed at Honfine’s factory located in Inner Mongolia.
Currently, Platina is working on a metallurgical test work program to produce high grade scandium concentrate from the Owendale project which could reduce capex and opex.
Platina and Honfine also intend to collaborate on establishing the cheapest processing technology required to produce the desired scandium products from Owendale ore.
The company is capitalised at around $16 million.
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