The completion of commercial scale trials has delivered Suvo Strategic Minerals Ltd (ASX:SUV) its first binding purchase order from C&D Logistics Group Co Ltd for up to 800 tonnes (+/-10%) of hydrous kaolin worth $660,000.
The order, which is earmarked for the premium paint sector, will be supplied over the remainder of 2023 and attracts a ~35% price premium compared to the weighted average selling price achieved in H2 2022, which is in line with Suvo’s primary strategic focus of to diversify its product offering and a focus on premium end-user markets in the Asia Pacific region.
“We are pleased to have received our first commercial order from C&D, the minerals division of Xiamen C&D – a global fortune 500 company with annual revenue circa US$100 billion,” interim non-executive chairman Aaron Banks said.
“This purchase order from C&D follows the successful commercial-scale trials demonstrating not only the quality of product at Pittong but also the company’s ability to form solid partnerships with large players in the Asia Pacific region.
“Furthermore, this order supports Suvo’s commitment to sell new volumes from the upgraded operations into premium markets and validates the company’s decision to upgrade the plant returning it to name-plate capacity.”
Moving foward
As Banks noted, the first purchase order was off the back of the 80 tonnes of product from the Pittong plant in Victoria supplied to C&D in late November 2022 for use in commercial-scale trials.
The trials demonstrated the quality of product at Pittong and Suvo’s ability to turn product trials into binding purchase orders.
Suvo is now working with C&D to place additional sales to customers in the Asia Pacific region and as part of its co-operation agreement with C&D signed in May 2022, it will also focus on the development and growth of ‘other kaolin-related product’ markets utilising Pittong Kaolin.
The broader aim of this is to develop long-term relationships with customers across a range of industries, products and locations.
Further orders are anticipated, pending the results of the lab-scale testing and commercial trials on Pittong’s other products supplied throughout H2 2022.