The Strandline Resources Ltd (ASX: STA) share price is rocketing upwards today.
The mineral sand producer's share price opened 9.5% higher than yesterday's close after announcing it secured the final binding offtake contract for its flagship project.
At the time of writing, Strandline shares are up more than 11.9% – selling for 24 cents apiece.
What did Strandline Resources announce?
In today's announcement to the ASX, Strandline Resources reported it has signed an agreement to sell all rutile produced at its Coburn project.
The agreement is with chemical company Venator Materials – a developer of titanium dioxide pigments.
The deal has secured approximately 17% to 20% of the project's revenue over the next 5 years.
With this final agreement, Strandline Resources has secured more than 90% of the project's future revenue under binding sales contracts.
Prior agreements have secured buyers for most of Coburn's other mineral outputs including, ilmenite, zircon concentrate and premium finished zircon.
The company plans to reserve the remaining 9% of minerals produced at Coburn for shorter-term spot market contracts.
Today's announcement follows Northern Australia Infrastructure Facility's (NAIF) investment decision to provide the company with a 15-year $150 million loan facility to help fund the development of the Coburn project.
The NAIF loan accounts for the major share of funding needed, leaving Strandline Resources to finalise the remaining $110 million of capital requirements.
Commentary from management
Strandline managing director Luke Graham said the agreement is a testament to the quality of Coburn's mineral sands products:
With over 90 per cent of the project's revenue now underwritten by binding sales contracts with major customers and a significant portion of the development funding secured via the NAIF loan, Strandline is on track to become Australia's next world-scale mineral sands producer.
Strandline share price snapshot
The Strandline share price has risen by 17% year to date, and by 135% over the past 12 months.
Aside from the Coburn project, the company has four projects in East Africa in various stages of development.
