Carbine Resources (ASX:CRB) who is re-developing the historical Mount Morgan gold project in Queensland, have announced a Principal Off-take Agreement (POA) for the sale of pyrite concentrate with global industrial mineral distributor, Talana Limited. Annual revenue from the agreement is projected to generate over A$25m p.a. as well as reduce the forecasted C1 Cash Costs by 62% from US$680/oz to US$260/oz. The projected All-in Sustaining Costs for the Project remain at US$234/oz. Analyst Comment: This is potentially the most significant announcement by Carbine to date. As pyrite is a relatively unknown commodity, we believe the market had uncertainty regarding both the off-take as well as the potential revenue that could be generated from pyrite sales. This announcement should provide comfort regarding both issues. In addition, securing offtake will assist Carbine with future debt negotiations as off-take for the pyrite concentrate would be a pre-requisite prior to drawdown. We maintain our valuation for Carbine at $0.26 / share (current price - $0.07 / share) as the off-take terms were in-line with our previous forecast (PFS).


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