Neurizer Limited Signs Binding, Long Term Offtake Agreement with Daelim Co Ltd for 500,000 Tonnes of Granular Urea Per Year
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.