On 17 January 2018, Korab Resources Limited (ASX: KOR) has announced to have entered into an agreement with ZM Ropczyce to co-operate with regards to funding, research, and development, market expansion and development of new products.
Ropczyce is into production and supplying of refractories needed to produce materials like steel, and glass. The company offers a full range of product with a wide spectrum of complex services relating to refractory ceramics throughout the life cycle of the product. It starts from the design and technical advice up-to servicing.
The parties will develop a long-term strategic relationship. As per the agreement Korab will be supplying up-to 20,000 tonnes of dead burned magnesia (or sintered magnesia as usually known) per year to Ropczyce. However, Ropczyce will provide Korab with support associated with research and development and broaden the product range and market of Ropczyce. The parties will allow for capital cooperation for the funding required for the development and expansion of the production of dead burned magnesia (DBM). However, the terms of capital cooperation have not been finalized yet. The actual price of the sintered magnesia will be set on a six-monthly basis and will be determined in a formal agreement, going forward.
Korab believes that this agreement will have a significant positive economic impact on the company however they are uncertain about the quantitative estimate of the same. The company will update the market on this as and when they are able to do it.
The agreement is not binding in nature. The purchase of the DBM is subject to testing and accepting test batch of DBM by Ropczyce. The obligation of Korab in this agreement to supply DBM in commercial quantities are subject to the completion of the permitting process, constructing the related infrastructure.
As on 7 January 2018, the company announced to raise funds through a placement of 2 million shares at a price of 2.5 cents each. The company used a placement instead of pro-rata issue due to time constraints, small size of the issue and high cost of conducting pro-rata issue.
Stock performance: KOR closed the day’s session at a price of $0.026, significantly down by 10.35 % with a market capitalization of $8.96 million. The stock opened at $0.030 which is its day high as well; however, it touched a day’s low price of $0.026. The stock has yielded a YTD return of 11.54% till date and posted returns of 3.57%, -3.33% and 16.0% over the last six months, three months and one-month period respectively. It has a 52-week high price of $0.063 and a 52-week low of $0.023, with an average volume of 251,346.