Suvo generates revenue from silica sands
PERTH (miningwekely.com) – Junior Suvo Strategic Minerals will generate between A$1.5-million and A$2-million in revenue from a three-year silica sand offtake agreement signed with BQ Nominees, trading as Barfold Quarry.
The silica sand is produced as a by-product of Suvo’s Pittong hydrous kaolin plant, in Victoria.
Suvo told shareholders on Thursday that Barfold would mobilise its own mobile equipment at the Pittong processing facility in the coming weeks, and would start dry screening of the existing silica sand stockpiles. All processing, capital and haulage costs would be incurred by Barfold.
Suvo currently has an estimated 200 000 t of silica sand stockpiles at the Pittong processing facility, of which around 180 000 t is considered saleable silica sand.
“We are delighted to enter into this agreement with Barfold Quarry for the sale of our silica sand from Pittong. In addition to generating immediate free cashflow and generating A$1.5-million to A$2-million across the term of the contract, the company is also saving an estimated A$9/t in costs to re-locate and backfill the Pittong mine,” said Suvo MD and CEO Hugh Thomas.
“The additional cash flow to be generated comes after the successful placement, which was necessary to provide additional working capital to the company as we expand our sales team and technical knowledge. Our number one focus is to increase our sales of hydrous kaolin in the Asia Pacific region, to match our increased production capacity following the successful plant upgrade at Pittong. We continue to make significant headway in defining and augmenting Suvo’s sales and distribution strategy.”
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