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Firering Strategic Minerals PLC (LSE:FRG) on Monday reported that its investee, Limeco Resources Ltd, will generate positive cashflow following the signing of a new services agreement. Firering holds a 21% stake in Limeco, with an option to increase this to 45%. Limeco is set to become Zambia's largest quicklime operation once fully operational.
New Services Agreement Enhances Cashflow
Firering Strategic Minerals PLC, a mining company with a focus on operations in Zambia and Ivory Coast, announced on Monday that its investee, Limeco Resources Ltd, will generate positive cashflow following the signing of a new services agreement. Firering holds a 21% stake in Limeco and has the option to increase this stake to 45%. Once Limeco is fully operational, it is projected to become the largest quicklime production facility in Zambia.
Logistics Agreement Expected to Boost Revenue
The agreement involves Limeco entering into a contract with an unnamed multinational commodity trading company for the provision of logistics services. This new deal is anticipated to generate revenue ranging from $600,000 to $720,000 annually. The revenue from this agreement is expected to result in positive operational cashflow for Limeco before the commencement of its quicklime production, which is scheduled to begin in the fourth quarter of 2024.
CEO’s Statement on Strategic Benefits
Firering’s Chief Executive Officer, Yuval Cohen, expressed that the immediate cashflow resulting from the logistics services agreement aligns with Limeco’s strategy to generate multiple streams of revenue. This agreement supports the ongoing development and operational success of Limeco's core quicklime project, reinforcing the company's commitment to enhancing its financial stability and growth potential.
Ongoing Negotiations for Quicklime Sales
In addition to the new services agreement, Firering noted that discussions are actively underway with major copper producers regarding the sale of quicklime. The company expects to finalize offtake agreements as Limeco’s operations ramp up over the coming months. These agreements are anticipated to further bolster Limeco's financial outlook and support its long-term growth strategy.
