Hot off its £1.98m listing last month, Golden Metal Resources PLC (LON:GMET) have already hit a significant miles stone from its Flagship Pilot Mountain Tungsten project announcing the signing of a Letter of Intent (LOI) with Global Tungsten & Powders LLC (GTP) for a future tungsten off-take agreement for the Nevadan project.
The partnership gains tremendous value from GTP’s prominent position as a supplier of refractory metal powders, which includes tungsten, tungsten carbide, and cobalt. The execution of the LOI marks a noteworthy milestone for both companies, offering promising opportunities for collaboration and growth within the tungsten industry.
Details of the Off-take Agreement
The non-binding LOI establishes the framework for a prospective off-take agreement for 65% WO3 tungsten concentrate produced at Pilot Mountain, proposing the acquisition of a minimum of 50,000 metric tonne units (MTU) W03 contained in tungsten concentrates, with a potential increase to 70,000 MTUs by mutual agreement.
Pricing to be based on a discount to the European APT (ammonium Paratungstate) quote provided by Fast Markets, with the agreement being subject to the successful completion of technical and legal due diligence along with Golden Metal’s securing the required funding to develop Pilot Mountain.
Covering a significant 14.8 square kilometre area, Golden Metal holds a 100% interest in the Pilot Mountain Project through its wholly-owned Nevada-based operating companies, BFM Resources Inc, and Pilot Metals Inc.
Cooperation and Strategic Stockpiles
In addition to the off-take agreement, GTP and Golden Metal’s aim to explore cooperation opportunities in developing a Western World supply chain strategy for tungsten products.
With the company said this strategy aligns with recent policy announcements from the US Department of Defence and the US Defence Logistics Agency, emphasising the need to build strategic stockpiles of critical minerals, including tungsten.
The announcement of the LOI with GTP not only enhances the overall profile of the Pilot Mountain Project but also increases its attractiveness as a target for non-dilutive grant funding for exploration and development.
Golden Metal’s is actively pursuing such funding opportunities, recognising the potential of the Project and its alignment with strategic initiatives in the critical minerals sector.
Oliver Friesen, the CEO of Golden Metal Resources, expressed his enthusiasm for the partnership with GTP, emphasising their status as a significant player in the global tungsten industry.
“Let me be the first to welcome our new partner Global Tungsten & Powders, which is a significant player in the global tungsten industry. The signing of this agreement represents a significant milestone and an encouraging step forward for our Pilot Mountain Project,” Friesen said.
“The LOI not only outlines the proposed terms of a supply agreement for future tungsten concentrate sales to GTP from Pilot Mountain, but also the cooperation between our two companies in regard to the development of Western World critical metals supply chains – with particular reference to tungsten.”
GMET’s London Stock Exchange-listed share price has risen 2.29 per cent today, currently selling at 8.95 pounds (4:10 pm UTC+ 8 hours).