The Centrex Metals Limited (ASX: CXM) share price is having an incredible day on Thursday.
In morning trade, the phosphate explorer’s shares are up 200% to a record high of 13 cents.
Why is the Centrex share price tripling in value today?
The catalyst for the rise in the Centrex share price on Thursday has been the release of a promising announcement.
According to the release, the company’s wholly owned Agriflex business has executed a conditional term sheet with Samsung C&T Corporation.
Samsung C&T is a subsidiary of global behemoth Samsung and one of the world’s largest traders in fertilisers. It has representatives in 73 offices in 43 countries around the world.
The release explains that the term sheet outlines the appointment of Samsung as its sole and exclusive marketing representative for sales into Korea, Japan, Indonesia, India and Mexico. The initial term is for the first three years of production from the company’s planned 800,000 tonnes per annum at the Ardmore Phosphate Project.
Samsung will provide marketing services for sales of an annual quantity equal to the lesser of 20% of the product from the Project or 160,000MT. In addition, Samsung may also assist the company with sales of any additional quantity of product not taken by other off-takers.
The price to be paid by Samsung will be the market netback price. This is defined as the actual sales price minus direct costs and a marketing service fee.
The conditions precedent for the agreement include Agriflex’s final board approval to proceed with the construction of the Ardmore Phosphate Project’s 800ktpa plant, Samsung’s internal corporate approvals, Agriflex’s financial close in relation to the financing arrangements for the Project, and the commencement of production from the plant.
Centrex also revealed that it is in advanced discussions with a number of other Australian and international potential customers. It intends to keep the market informed as these develop.