Emerging bauxite producer VBX secures term sheet for offtake, prepayment facility
VBX has secured an indicative term sheet for a A$10-million prepayment and offtake facility with materials distribution and supply chain service provider thyssenkrupp Materials Trading Asia.
The prepayment facility will provide additional funding for the company while it completes a definitive feasibility study (DFS) on the Wuudagu bauxite project, in Western Australia’s Wunambal Gaambera county.
The company is also advancing approvals and licences to construct and operate the project.
The prepayment facility will be repaid through a fixed discount on 500 000 t of bauxite product to be delivered every year over a five-year period from Wuudagu.
The parties will use commercially reasonable endeavours to negotiate the terms of definitive binding documentation on terms consistent with the term sheet – with the aim of executing the binding documentation as soon as practicable.
If definitive binding documentation is not signed by July 31, either party may terminate the term sheet.
“Wuudagu’s attractive low-silica product quality, short and efficient logistics, expanding scale and northern Australian location are highly desirable attributes for a bauxite supply source in the global aluminium industry.
“VBX has made a conscious decision to retain all rights to future products produced at Wuudagu and to seek to use these rights to provide attractive funding solutions to progress the project,” says VBX founder and MD Ryan de Franck.
He adds that this indicative term sheet with tk accelis, through its subsidiary thyssenkrupp Materials Trading Asia, provides a pathway to finalising an attractive funding solution while the DFS is completed and approvals are obtained.
“We look forward to working collaboratively with tk accelis to negotiate definitive binding documentation.”