Centrex Metals Limited (ASX: CXM) takes a final exit from its iron ore interests by the sale of its Port facility located on the east coast of the Eyre Peninsula South Australia.
On Monday, the company announced that it had inked a contract with FREE Eyre Limited for the sale of its Port Spencer landholding for $1.4 million.
FREE Eyre Limited is a rural investment company based in the Eyre Peninsula. The company focuses on reducing the cost along the agricultural supply chain and increasing competition in the agribusiness. It is expected that the sale of Port Spencer will be completed in late February 2019 subject to the satisfaction of certain conditions.
The sale outlines the transformation of Centrex Metals from iron ore to a fertilizer business under which the company primarily develops Phosphate, Potash and Base Metals. Moreover, the company intends to utilize the proceeds from this sale to fund the development of the company’s flagship Ardmore Phosphate Rock Project.
Ardmore located in North West Queensland is fast approaching production stage as Centrex has recently signed a first trial shipment for a 5,000 wet tonne phosphate rock concentrate. The contract read that the trial shipment which is to be made to a leading manufacturer of regional fertilizer will be sold at a market pricing associated with the equivalent quality cost and freight (“CFR”) benchmarks.
The report read that concentrate which is to be shipped will be produced from Centrex’s start-up operation at Ardmore where the modular wet processing plant is upgraded to 140tph. The DFS study of the project confirmed that plant is readily upgradable to 140tph for the proposed full-scale operations designed at 800,000 wet tonnes per annum.
It will allow the company to provide its several potential customers with the trial shipments of around 5,000 to 6,000 wet tonnes. As a result, the company will be enabled to secure long-term offtake agreements that are essential for project financing to ramp up the project to full-scale operations by late 2019.
However, this trial shipment contract is conditional on Centrex successfully constructing and operating the start-up operation and providing the shipment parcel before September 2019.
In today’s trading session, 31 December 2018, Centrex shares have been trading flat. The stock last traded at $0.115 with a market capitalization of $36.3 million. Over the past 12 months, CXM stock has witnessed an attractive performance change of +33.72% including a positive change of 15% in just last six months.