NeuRizer Limited has signed a binding, long term offtake agreement with Daelim Co Ltd. for 500,000 tonnes of granular urea per year. Major milestone with 50% of the initial annual production target now contracted to NeuRizer's long-term strategic partner and significant shareholder for the first five years of operation DL Trading will purchase 500,000 tonnes of granular urea per annum from NeuRizer at an index linked price Agreement is for a term of an initial five years with an option to extend by mutual agreement Contract value of AUD 1.5 billion based on CRU forecast prices . The Company and DL Trading have signed a binding take or pay offtake agreement for the supply of urea fertiliser. This brings NeuRizer's NeuRizer Urea Project (NRUP) project another step closer to production by underpinning future revenue. The Company entered into a Heads of Agreement with DL Trading for the offtake in November 2021
and the finalisation of this Agreement further extends the strong relationship NeuRizer has with Daelim whose subsidiary DL E&C was awarded the Engineering, Procurement, Construction and Commissioning (EPCC) contract for NRUP in June 2021. This take or pay offtake agreement comes shortly after the recently announced agreement for a private share placement to its international top tier construction partner DL E&C Co. Ltd. where DL E&C took a 9.1% stake in NRZ. This agreement provides the Company with certainty of revenue that is required for project financing. This is likely to be the only offtake agreement required to secure debt funding for the construction of the project as it is sufficient to cover all costs including finance, however it does not preclude NeuRizer from entering into further offtake agreements with other parties should this be deemed appropriate. Key terms of the DL Trading Offtake Take or Pay Agreement Contract to take 500,000 tonnes per year; The contract is focused purely on the export market; The contract is Take or Pay; Initial term is for five years; Option to extend the contract period by mutual agreement; An agreed pricing mechanism based on index linked pricing; and The contract value of AUD 1.5 billion is based on forecast CRU prices (at current prices it would be worth over AUD 2.8 billion. In addition to the above key terms there are also a number of conditions precedent largely relating to the successful production of urea: Commercial Production being 30 consecutive days of continuous production at the rate of 2,650 tonnes per day (plus or minus 10%) has occurred and a taking over certificate is issued by NRZ to DL E&C under the EPCC contract; NeuRizer has secured all necessary infrastructure and facilities to enable the shipment of at least 84,000 tonnes product per month; If the Board's final investment decision is not to proceed with the project, then the agreement is terminated.