Victory Metals (ASX:VTM) said Tuesday (December 17) that it has signed a strategic non-binding memorandum of understanding (MOU) with Sumitomo (TSE:8053), a leading integrated trading and investment enterprise.
The MOU establishes a potential long-term mixed rare earth carbonate offtake partnership between the two companies. It will have an initial five year offtake term with a possible five year extension.
According to Victory Metals, its target is to provide Sumitomo with 30 percent of the annual mixed rare earth carbonate production from the North Stanmore heavy rare earth elements (HREE) project.
“We are extremely pleased to be partnering with Sumitomo Corporation, a globally recognised powerhouse with extensive industry expertise and a proven track record of securing critical mineral supplies,” said CEO and Executive Director Brendan Clark. “This agreement reflects the strategic value of the North Stanmore Project and confirms the global significance of our unique heavy rare earth element composition within the North Stanmore clay deposit.”
North Stanmore is located approximately six kilometres from Cue, Western Australia, and holds six tenements.
A resource estimate published in July shows that the project holds 235 million tonnes, with 63 percent in the indicated category. Victory Metals said this represents Australia’s largest indicated resource for HREE-dominant deposits.
The company will discuss pricing with Sumitomo during negotiations for a binding term sheet, which they aim to enter by October 31, 2025. Other material terms will be discussed at that time as well.
“We plan to utilize our global network to sell the rare earths produced by Victory. We look forward to future partnerships,” Sumitomo commented in Tuesday’s press release.
“Sumitomo’s financial strength, global logistics expertise and commitment to sustainable growth make it the ideal long-term partner for Victory Metals as we continue to progress (North Stanmore) towards development,” Clark added.
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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
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