Zeotech (ASX: ZEO) has signed a non-binding memorandum of understanding (MoU) with Jiangsu Mineral Sources International Trading (MSI), a prominent Chinese trading house, to explore a potential offtake agreement for Zeotech’s high-quality kaolin from its Toondoon project in Queensland. The MoU encompasses the possible distribution of Zeotech’s low-iron kaolin, pink cosmetic-grade kaolin, and bauxitic clay direct shipping ore (DSO) products.
The agreement allows both companies to negotiate terms for a potential offtake or distribution arrangement, under which MSI could purchase various product volumes from Zeotech over a five-year period. According to Zeotech CEO James Marsh, this collaboration presents a pathway to early cash flow from the company’s kaolin resources, complementing the accelerated commercialization of its AusPozz high-reactivity metakaolin project. The Toondoon deposit, located north of the Sunshine Coast, boasts high-grade kaolin and is being developed as an open-cut mining operation with access to the Port of Bundaberg.
Under the MoU, MSI could acquire 800,000 tonnes of low-iron kaolin DSO, 150,000 tonnes of pink cosmetic-grade kaolin DSO, and 1,500,000 tonnes of bauxitic clay DSO over the initial five-year term. Marsh highlighted the bauxitic clay DSO sales as a value-add opportunity, potentially converting a stockpiled product into a revenue stream and enhancing the project’s overall economics. The MoU is set to expire on December 31, 2025, and can be terminated by either party with 30 days’ notice.
