Heron signs offtake agreement over Woodlawn production

PERTH (miningweekly.com) – ASX-listed Heron Resources has entered into an offtake agreement for the zinc, copper and lead concentrates produced from its Woodlawn zinc-copper project, in New South Wales.

At steady state, Woodlawn is expected to produce 70 000 t/y of zinc concentrates, 30 000 t/y of copper concentrates and 25 000 t/y of lead concentrates.

Heron on Wednesday reported that Louis Dreyfus Company Metals had been awarded the base metal concentrate offtake from the Woodlawn project from the start of production through to the end of 2021, a period of around three-and-a-quarter years. The offtake contract covers 100% of the zinc, copper and lead concentrates to be produced over this period.

“Over the past 12 months, we have run a highly competitive process for the much sought after concentrates from the Woodlawn project, and we are very pleased to have reached an agreement with LDC Metals, a large and experienced concentrate trader with an excellent reputation in the market,” said Heron MD and CEO Wayne Taylor.

“Zinc concentrates are particularly in short supply in the global marketplace, which is expected to remain tight for the next few years, and this has resulted in the company agreeing attractive commercial terms for 100% of mine output during the critical first few years of production at Woodlawn.”

The offtake agreement is a "key milestone in the pre-financing activities", with concentrate shipments expected to be made from either Port Kembalda or Port Botany, in lot sizes that will allow Heron to manage working capital requirements, as well as securing it bulk shipping freight rates.