The Neometals Ltd (ASX: NMT) share price is on the charge today. Shares in the Aussie miner have rocketed 7.9% higher at the time of writing to 48 cents per share – a new 52-week high.
Why is the Neometals share price surging higher?
The big news today was a new agreement to sell titanium to a Chinese titanium slag producer. Neometals has signed a memorandum of understanding (MOU) with Jiuxing Titanium Materials (Liaonging) Co. Ltd.
That news has helped propel the Neometals share price to a new 52-week high during Friday trading. According to the release, the MOU contains an evaluation framework and key commercial terms.
That MOU will help the parties work towards a binding formal offtake agreement for the supply of 800,000 dry tonnes per annum (dtpa) of mixed gravity concentrate or 500,000 dtpa of ilmenite and 275,000 dtpa of iron-vanadium concentrate for a 5-year period on a take-or-pay basis from first production.
It's a significant agreement that centres on Neometals' Barrambie Titanium and Vanadium Project. Neometals says that the Barrambie site is the most advanced, undeveloped hard-rock titanium mineral resource in the country.
The Neometals share price is climbing on the back of the update which included a set of next steps. Neometals will mine a 250-tonne bulk sample from Barrambie and transport mixed concentrate to China.
Jiuxing will blend and batch smelt 100 tonnes in its commercial titanium smelter with negotiation of full-form offtake agreements and BOO/T agreements.
Foolish takeaway
The Neometals share price has charged higher to a new 52-week high in early afternoon trade. That comes on the back of a significant milestone deal for its Barrambie Project.
Today's MOU announcement brings Neometals one step closer to a major, binding supply agreement to a leading Chinese titanium producer.
That has buoyed investors spirits and pushed shares in the Aussie mining group higher.
