Image Resources has secured a binding heavy mineral concentrate (HMC) offtake prepayment facility for its Atlas mineral sands project located 170km north of Perth in the North Perth Basin.
The offtake prepayment facility is for US$20 million. It was executed with Image Resources’ Chinese offtake partner, Shantou Natfort Zirconium and Titanium Co. Natfort has been Image Resource’s key offtake customer for HMC produced at the company’s Boonanarring project since 2019.
Facility funds will support working capital requirements as Image Resources moves through construction and commissioning of its Atlas project, with a stretch goal of achieving first HMC production in Q1 2025 and return to operating revenue in Q2 2025.
Drawdown of the facility is subject to standard conditions precedent for this type of financing, along with Image Resources securing construction and delay-in-start-up insurances to minimise the risk of any major production delays. The drawdown will occur in two tranches of US$10 million each, anticipated in November 2024 and January 2025.
The 12-month unsecured facility, chosen as a lower cost and more favourable option to conventional debt or issuing equity, carries a fee, payable at the end of the term by delivery of HMC of equivalent market value.
The facility’s US$20 million principal, plus accrued interest, will be repaid by the delivery of HMC from Atlas. Approximately 25 per cent of each shipment will go towards repaying the principal.
Image Resources’ Managing Director and CEO, Patrick Mutz, thanked Natfort for providing the company with the opportunity to participate in the prepayment facility arrangement.
“These working capital funds are crucial for ensuring the construction pace for the development of Atlas is maintained at a high level to achieve first HMC production and sales as quickly as practicable, with the goal of returning to profitability in 1H 2025.”
Mr Mutz said the funds will also help maintain the momentum with the various other work programs targeting growth, including other project feasibility studies and overall corporate support.
“We extend our gratitude to Natfort for its ongoing support as Image’s key offtake partner through the successful and continuing market-based HMC offtake agreement and for providing this prepayment facility to the benefit of all Image shareholders.”
