Andromeda Metals Limited
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Where Will Andromeda's Kaolin Products Be Distributed Under the New Sales Agreement?
Andromeda Metals Secures Strategic Sales and Distribution Agreement with IberoClays
Adelaide, 19 January 2024 - In a significant move that sets a new precedent in the kaolin industry, Andromeda Metals Limited (ASX: ADN) announced a groundbreaking sales and distribution agreement with IberoClays SLU. This deal marks a major stride in Andromeda's global market expansion, particularly into the Mediterranean region.
The Agreement: A Closer Look
The agreement, a testament to Andromeda's innovative approach and high-quality kaolin products, covers the following key aspects:
Great White CRM™ Sales and Distribution: This product, aimed at the ceramics and tile sectors, will see an initial supply of 8,000 wet metric tonnes (wmt) in the first year, with a potential increase to 10,000 wmt. From the second year onwards, the volume could scale up to 20,000 wmt annually. The deal grants IberoClays exclusive marketing and distribution rights in Spain, Portugal, and Italy, and non-exclusive rights in France, Morocco, Egypt, and Turkey.
Great White HRM™ for the Concrete Industry: This product will be supplied at 2,000 wmt per annum, with non-exclusive rights in Spain and Portugal. The deal is contingent upon certification and end-user agreements in these countries.
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Pricing and Prepayment Terms: Reflecting confidence in the quality of the products, pricing from the second year aligns with the 2023 Definitive Feasibility Study (2023 DFS). An introductory discount of 7-8% applies in the first year. The prepayment terms are set until 30 September 2025.
Contract Duration: The initial term spans five years from the first delivery, with yearly extensions unless terminated with a 12-month notice.
Strategic Implications and Opportunities: Expansion into the Mediterranean
The agreement follows a Letter of Intent from IberoClays and rigorous testing of Great White CRM™, highlighting its suitability for ceramics. This partnership with IberoClays, a leading formulator of ceramic tile minerals in Europe, positions Andromeda Metals at the forefront of the kaolin market in the Mediterranean region.
Decarbonizing Concrete
A notable aspect of the deal is the inclusion of Great White HRM™, a high-performance concrete additive. This product aligns with Europe's comprehensive Emissions Trading System (ETS), showcasing Andromeda's commitment to sustainable and environmentally-friendly solutions.
IberoClays: A Key Player
IberoClays, founded in 2013, has emerged as a significant supplier in the ceramics industry, handling over 350,000 tonnes per annum of various raw materials. The company's growth and strategic location in the Port of Castellón, a major global ceramics hub, make it an ideal partner for Andromeda.
Market Impact and Future Outlook: CEO Insights
Mr. Alberto Piquer González, CEO of Iberoclays, expressed enthusiasm for launching Andromeda’s products in the Mediterranean. He highlighted the timely introduction of The Great White Project amidst global supply disruptions and the depletion of traditional kaolin sources.
Bob Katsiouleris, CEO of Andromeda, emphasized the strategic nature of the partnership with IberoClays. He pointed out the potential for further opportunities in the Asia-Pacific region and the high-value opportunity in the European market for their concrete additive.
Warehouse Infrastructure
IberoClays' recently built warehouse at the Port of Castellón will play a crucial role in housing and distributing Andromeda's kaolin products, reinforcing the operational capacity and reach of this partnership.
This agreement not only signifies a major milestone for Andromeda Metals Limited but also reshapes the landscape of the kaolin industry in the Mediterranean and potentially, the global market. The strategic collaboration with IberoClays propels Andromeda into new markets, promising growth, sustainability, and innovation in the kaolin sector.
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