Agrimin inks another offtake deal as 70% of planned potash production now locked in

ASX-listed potash hopeful Agrimin (ASX: AMN) has signed a binding offtake agreement with Gavilon Fertiliser for the supply of 50,000 tonnes per annum of SOP fertiliser. The company's stock is up 16% in early-trade.

Agrimin is advancing the Lake Mackay Project in Western Australia. The company expects to make a final investment decision for the project in the third-quarter of 2022. If all goes to plan, Mackay is expected to hit producer status in the first-half of 2026.

Key offtake terms

The offtake agreement has a 7-year term from commencement of commercial production. Pricing will be based on market prices.

Gavilon will purchase 30,000t and 40,000t in years 1 and 2 respectively, as Lake Mackay ramps up and 50,000t per annum when steady-state production is achieved.

This new offtake agreement represents the company's first US-based offtake deal.

"The USA represents an important SOP market and we are delighted to secure an offtake partner which has one of the largest and most efficient wholesale fertiliser distribution networks in the country," said CEO Mark Savich.

A loaded offtake book

Agrimin has now secured offtake agreements for a total of 315,000 tonnes per annum (tpa) of SOP fertiliser.

Previous offtake agreements include:

• 150,000tpa, 10-year binding offtake with Sinofert, China's main potash importer

• 115,000tpa, 7-year binding offtake with Nitron, a global trader of chemical and agricultural fertilisers

"We have now committed our minimum target of 70% of planned SOP production under long-term offtakes, which is a significant milestone as we advance our Tier 1 Mackay Potash Project to a final investment decision," said Savich.

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