Noventa shares lifted by new tantalum offtake deal at ‘current market prices’

Tantalum concentrate supplier with assets in Mozambique Noventa (LON:NVTA) has signed a new offtake agreement for tantalum concentrate from its flagship Marropino mine for similar quantities as in its existing deal with a pricing that “reflects current market prices".
Shares in the company rose 4.5% on the news in early deals.
The three year agreement will start in 2011, providing tantalum for what Noventa identified as a “major processor and refiner of specialist metals and advanced ceramics.” The deal is subject only to a sample shipment of material being chemically acceptable.

Last month, the company renegotiated and signed an amendment to its existing offtake agreement to reduce the annual quantities of tantalum concentrate to be sold, allowing it to test the free market, gain new customers and take full advantage from any increases in market prices.

In February 2010, Noventa terminated the agreement for the sale of morganite produced by the Marropino mine in Mozambique with Miranda Gems Hong Kong Ltd, while reaching another offtake agreement with another party. The new deal was for the acquisition of the morganite in various states of treatment to produce the finished gem stones, which were on consignment to Miranda, for US$1 million.
The Marropino mine was restarted April after being placed on care and maintenance in May 2008. In October 2009, Noventa declared it was mulling all options regarding the asset, subsequently deciding to reopen Marropino due to the positive medium term outlook for tantalum demand.
Following the restart, Noventa said that concentration of tantalum in the mine’s tailings ore was found to be significantly higher than expected, while the choice of liberation process and technique had proven to be successful at an industrial scale. An independent laboratory has verified that the tantalum concentration in the tailings exceeds the previously estimated 115 ppm (parts per million) based on samples of the entire tailings dump.
Noventa is looking to capitalise on the demand for tantalum which is used in the manufacturing of capacitors for mobile phones, motherboards and audio and video equipment and which the company said was projected to outstrip supply in 2010 and 2011, while the production of microelectronic goods was projected to increase.
Noventa plans another capital raising to take its total funds raised to US$25 million this year to cover both the Marropino plant upgrade and the development of the Mutala mining concession.
Exploration activity at Marropino in 2010/2011 will focus on the assessment of the other known, relatively minor pegmatite occurrences and colluvial/eluvial deposits to the east of the pit, which may provide additional feed for the Marropino plant.