Fortress Minerals’ subsidiary, Fortress Resources, has entered into two new nine-month offtake agreements with an unnamed independent third-party domestic steel mill in Malaysia.
The two agreements will run at the same time.
Under the agreements, Fortress Resources has agreed to deliver approximately 150,000 wet metric tonnes and 90,000 tonnes per agreement to the domestic steel mill from Oct 1 to June 30, 2024.
Both deliverables are subject to a variance of an additional or a reduction of 20% at the option of Fortress Resources.
The selling price of the deliverables will be based on a formula guided by the average of the available daily price of Platts for 65% Fe CFR North China, adjusted subject to the Fe content of each shipment of the deliverables. It will also be guided by the average of the available daily price of Platts for 58% Fe CFR North China, adjusted subject to the Fe content of each shipment of the deliverables. Platts refers to the price benchmark service for the oil industry.
According to Fortress Minerals OAJ , the agreements will provide a firm source of recurrent income and cash flow to the group during the period it has signed for. It will also strengthen its financial position, although it will not have any impact on the group’s net asset value (NAV) for the FY2024 ending Feb 29, 2024. It will, however, contribute positively to the group’s earnings per share (EPS) for the FY2024.
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Shares in Fortress Minerals closed flat at 26 cents on Oct 23.
