Australia-based Hastings Technology Metals Limited has entered into a binding term sheet providing for an integrated tolling and offtake arrangement for rare earth concentrate with Baotou Sky Rock Rare Earth New Material Co., Ltd, supporting improved economics for Stage 1 of its 100%-owned Yangibana Rare Earths Project.

The Yangibana Project contains a high percentage of NdPr to Total Rare Earth Oxide in the orebodies averaging 37% over the life of mine and up to 52% in some areas of the ore bodies.

Since the announcement of the Staged Development Study in May 2023 to focus on the construction of the Yangibana Project’s mine and beneficiation plant, Hastings has pursued various avenues to bring forward cash flows and to realize higher prices for its rare earth concentrate. Through this process, Hastings has leveraged its relationship with Baotou Sky Rock and its network in the rare earth industry to negotiate the Term Sheet which provides for a new toll treatment and offtake arrangement for rare earth concentrate from the Yangibana Project.

Hastings had previously signed an offtake contract with Baotou Sky Rock in November 2018 for the sale of mixed rare earth carbonate (MREC) which lapsed in November 2023.

Established in 2006, Baotou Sky Rock is a privately-owned Chinese high-tech enterprise specializing in the production of rare earth metals and permanent magnet materials. Its main products are sintered neodymium boron and sintered samarium cobalt magnets.

The integrated arrangement provides for a competitive fee structure for the multi-stage processing of the Yangibana Project’s concentrate through to an MREC product, and further to separated rare earth oxides. Toll treatment volumes will be arranged and managed by Baotou Sky Rock with established, privately owned Chinese groups and the final rare earth oxides product will be sold at a price linked to benchmark indices for individual oxides.

This arrangement is intended to allow Hastings to realize increased payability for its concentrate product, thereby significantly improving the economics of the Yangibana Project. The term sheet is to be augmented with a sales contract after completion of pre- production pilot test work six months prior to first product delivery.

The arrangement with Baotou Sky Rock supplements the offtake contract signed with thyssenkrupp Materials Trading in April 2021. The terms of the thyssenkrupp agreement were updated in September 2023 to include up to two-thirds of the Yangibana Project’s annual concentrate production.