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Canada Rare Earth enters three-year hedged contract
2016-09-08 14:38 MT - News Release
Mr. Tracy Moore reports
CANADA RARE EARTH ENTERS INTO HEDGED CONTRACTS TO PURCHASE AND SELL RARE EARTH CONCENTRATE
Canada Rare Earth Corp. has entered into agreements for the purchase and corresponding sale of 16,500 metric tons of rare earth concentrate over a three-year period.
The initial shipment of 50 metric tons will commence within 30 days, and thereafter, shipment volumes will increase steadily over a six-month period to 500 metric tons per month and remain at this monthly amount for a further 30 months. The seller, Canada Rare Earth and the buyer are receptive to increasing volumes above 500 metric tons per month.
The purchase and sale prices of the inventory are specified for the duration of the contracts. Price adjustments may be requested based on demonstrable and reasonable changes in direct costs and subject to the ability to recover higher costs in the sale to the ultimate customer.
Tracy Moore, chief executive officer of Canada Rare Earth, commented: "We are very pleased to enter into these hedged contracts between a capable supplier and a customer that has selected our product offering in place of existing supply. The transaction demonstrates our ability to generate revenues despite a challenging market for rare earths. We are working with the selling group to extend product sales beyond this first customer to separation refinery projects we are developing."
Peter Shearing, chief operating officer of Canada Rare Earth, added, "Our team worked very hard to negotiate a hedged transaction, matching the interests and concerns of both the selling party and our customer, while acting in the commercial best interests of Canada Rare Earth."
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