Suay Chin is a Singapore-based company that was formed to take advantage of its extensive contacts throughout the Chinese chemical industry and to operate as a trading company for the supply of materials to the Chinese industry. Suay Chin is a strategic shareholder in Kodal and currently holds 2,937,801,971Kodal shares, equating to 14.29% of the total issued share capital of the Company.
Suay Chin is involved in all levels of the lithium market from supplying material to acid producers, supplying spodumene concentrate and lithium hydroxide to the Chinese lithium carbonate producers, to the final end-user chemical and battery manufacturers. The company receives strong support from Shandong Mingrui Chemical Co Ltd, which is a long-term material supplier to existing lithium carbonate producers in Shandong Province, and boasts sound understanding of the Chinese lithium market.
Suay Chin arranged the metallurgical testing of Kodal’s spodumene rich pegmatite samples by existing lithium carbonate producers in China and is expected to continue to offer strong technical contribution to the development of the Project.
Kodal has been informed that there has been a restructuring of the ownership of Suay Chin which is now indirectly controlled by Zhejiang Kanglongda Special Protection Technology Co. Kodal confirms that the binding term sheet entered into between Kodal and Suay Chin in March 2017 remains in place.
OFF-TAKE TERM SHEET
Kodal Minerals and Suay Chin entered into the Off-take Term Sheet in March 2017, which, amongst other things, sets out the basis on which the parties will negotiate an extended off-take agreement (“Formal Agreement”) for between 80% and 100% of the spodumene product produced at the Project (the “Contract Quantity”) for a period of three years from the commencement of commercial production. The parties will commence negotiating the Formal Agreement as soon as reasonably practicable following the Company completing a scoping study in relation to the Bougouni Project (the “Project”).
The Off-take Term Sheet sets out certain agreed off-take principles which will be incorporated in any Formal Agreement. These principles include the parties agreeing to buy and sell the Contract Quantity as well as the Formal Agreement including a right to match any third party off-take terms agreed for a period of three years following the expiry of the Formal Agreement. If the parties have not entered into the Formal Agreement within six months following completion of the scoping study, Suay Chin will have a first right of refusal for a period of three years from first production of product from the Project whereby Kodal Minerals may not enter into any agreement with a third party to sell more than 20% of future production from the Project without having first offered to sell the production to Suay Chin on the terms offered by the third party. Shareholders should note that there can be no guarantee at this stage on the timing of completion of the Formal Agreement or if any such agreement will ultimately be agreed.