EV Resources (ASX:EVR) is making significant strides towards securing the necessary raw materials for its Tecomatlán Processing Plant in Puebla, Mexico. The company has recently inked four non-binding Memorandums of Understanding (MOUs) with regional ore suppliers. These agreements have the potential to lock in a substantial portion, estimated at 50% to 60%, of the plant’s required feedstock capacity.
These strategic mid-year agreements are set to establish a robust supply pipeline within Mexico, capable of delivering approximately 2,330 to 2,430 tonnes per month of antimony feedstock. This volume is calculated based on a 28-day operational month and is considered “sufficient” to kickstart sustainable operations at the Tecomatlán facility once its ongoing upgrades are finalised.
Key Supplier Agreements
Of the four non-binding MOUs, three represent new partnerships, while one was previously announced by EVR and has been consolidated into the recent June 2 update. These agreements detail the following supply arrangements:
- Supplier 1: Located just eight kilometres from the Tecomatlán facility, this supplier is set to provide an estimated 2,000 tonnes per month (tpm) of ore grading around 5% antimony.
- Supplier 2: This new agreement is with an owner in Guerrero, situated approximately 350 kilometres from the plant. They will supply between 200 to 300 tpm of ore grading 6% antimony (Sb).
- Supplier 3: Another new partnership, this time with a private company in Guerrero, located 310 kilometres away. This supplier will contribute 80 tpm of ore with a grade exceeding 5% Sb.
- Supplier 4: A local owner in Puebla, less than 130 kilometres from the processing plant, will supply 50 tpm of ore grading greater than 5% Sb.
Framework for Future Operations
The company has highlighted that these MOUs will serve as a foundational framework for future, more definitive agreements. This includes the establishment of formal purchase contracts and ore delivery orders. The agreements also stipulate that the material is to be delivered to the Tecomatlán plant at an approximate particle size of 150mm. Furthermore, the feedstock is categorised into two potential quality grades:
- Low-grade material: This category encompasses ore with an antimony content ranging from 5% to 29%.
- High-grade material: This refers to ore with an antimony content exceeding 30% Sb.
Expanding Supply and Optimisation Efforts
EV Resources is not resting on its current achievements, with indications of further expansion in its supply chain. The company is reportedly in advanced negotiations for an additional memorandum of understanding. Industry insights suggest that EVR is also actively assessing more ore-producing properties in the Oaxaca region, signalling a proactive approach to bolstering its long-term feedstock security.
Concurrently, EVR has commenced crucial optimisation studies and metallurgical test work. These efforts are focused on third-stage cleaning options for its Phase One two-stage gravity concentrator circuit. Initial testing of this circuit has yielded promising results, demonstrating recoveries of 90.8% and producing a concentrate grading between 22% and 36% Sb. The ultimate goal is to produce a final antimony concentrate that can be directly sold to smelters through future offtake arrangements. This includes an existing MOU with Wogen/XCLRI, indicating a clear path to market for the processed material.
Project Timeline and Development
The Tecomatlán facility is being targeted for its first antimony concentrate production in the latter half of the 2026 calendar year. Significant progress has already been made, with the dry commissioning of the grinding circuit successfully completed. Importantly, the Phase One operations do not require any further permitting, streamlining the path to production.
As of early Tuesday, EVR’s share price was trading at approximately 0.8 cents per share. The company’s strategic moves to secure feedstock and advance its processing capabilities position it for a significant role in the antimony market.
