Almonty Industries Successfully Extended Its Sangdong Mine’s Off-take Agreement to 15 Years
Almonty Industries Inc. (“Almonty” or the “Company”) (TSX: AII / OTCQX: ALMTF / Frankfurt: 1MR) is pleased to announce that it has successfully renegotiated and subsequently amended its off-take agreement, originally dated March 12, 2018, (the “Amended Off-Take Agreement”) with an existing customer (the “Customer”) for the tungsten concentrate to be mined and processed at the Company’s wholly-owned Sangdong Tungsten Mine in South Korea. As announced in news releases dated March 13, 2018 and March 15, 2018, the original agreement had a term of 10 years that called for floor price revenues for the Company in a minimum amount of 500,000,000 CAD.
The Amended Off-Take Agreement, based on updated pricing models and subject to the terms and conditions of the amended agreement, increases the term from 10 years to 15 years and now calls for floor price revenues for the Company in a minimum amount of 750,000,000 CAD.
Lewis Black, Chief Executive Officer of Almonty, commented: “We are very pleased to have been able to negotiate and execute a 50% increase to the already single largest underwritten minimum revenue floor price supply agreement in the modern era in tungsten for our wholly-owned Sangdong Mine. This further demonstrates the confidence our customer has in the long-term reserve outlook at the Sangdong Mine. We believe that the outcome of this amended agreement, in conjunction with our other operating and development tungsten assets will ensure our continuing market dominance as a Western-based tungsten producer for many years to come.”
Related Party Transaction
The Customer is a related party to Almonty holding beneficial ownership of securities of Almonty carrying more than 10% of the voting rights attached to all of Almonty’s outstanding voting securities. Accordingly, the entering into of the Amended Off-Take Agreement is deemed to be a “related party transaction” as defined under Multilateral Instrument 61-101-Protection of Minority Security Holders in Special Transactions (“MI 61-101”).
The Amended Off-Take Agreement is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to subsections 5.5(d) and 5.7(1)(c) as the transactions contemplated by the Amended Off-Take Agreement will consist of the purchase and sale in the ordinary course of business of the Company of inventory consisting of personal or movable property of the Company and the Amended Off-Take Agreement was approved by the Board of Directors of the Company.