Marquee Resources Limited (ASX: MQR) today announced that the company has inked a non-binding Memorandum of Understanding for the copper-cobalt offtake with the Chinese manufacturer of battery cathode materials, Zhejiang Meidu Haichuang Lithium Battery Technology Co., popularly known as China Hitrans.
Following the news of non-binding offtake agreement Marquee shares rushed on Australian Securities Exchange. So far, MQR’s share price has jumped up 36.364% to stand at $0.105 as on 14 November 2018 (1:56 PM AEST).
As per the terms of agreement, Marquee Resources will provide China Hitrans with a metallurgical product sample for independent testing within the next 3 months. Further, in collaboration with Marquee, China Hitrans will conduct lab scale research on the best products that Marquee can produce out of its cobalt projects.
With this Memorandum of Understanding, Marquee confirms the positive response to its Cobalt Sulphide marketing strategy in China as it has experienced a strong Chinese demand for its Cobalt Sulphide projects such as Werner Lake during the recent site visits to China.
Marquee Managing Director Mr. Charles Thomas stated “Signing this type of agreement at this stage of development is another very important milestone for the Company. The interest shown by numerous Chinese end users demonstrates the strong appetite for cobalt and in particular the potential product that Werner Lake could deliver.”
However, this proposed agreement is confined to Marquee’s interest in the Werner Lake deposit that stands at 30%. And further due to the non-binding nature of the agreement there is no certainty that parties will proceed to a binding offtake agreement.
The company further revealed its plan to start negotiations to enter into a formal binding offtake agreement for the sale and purchase of any Werner Lake product. But it has been noted that Marquee is still in its exploration phase and there is no guarantee that it will proceed to commercial mining operations, although Werner Lake drill results are expected shortly.
About China Hitrans
Based in China’s most economically developed area, China Hitrans is a high-tech enterprise that develops, produces and sells ternary cathode materials and ternary precursors of lithium battery. The company is a subsidiary of Shanghai Stock Exchange listed Meidu Energy Co. Ltd. It is ranked highly in Chinese cathode material manufacturing community. Holding company Meidu Energy explores and process energy products. The most important part of Meidu Energy Co. Ltd.'s layout is its new energy industry chain under which it integrates raw material supply, research and development, production and sales.
Marquee shares traded at $0.105 with market capitalization of $3.29 million. However, looking to the historical performance of the stock we can see MQR has massively fallen by 69.20% over the past one year.
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