EV Resources Ltd
- ASX Code: EVR
- Market Cap: $12,160,013
EV Resources Locks In First Binding Ore Supply Deal, Bringing Tecomatlán Proof-of-Concept Within Reach
EV Resources (ASX: EVR) has executed its first binding five-year Ore Supply Agreement with Lucero Grupo Minero de Puebla S.A. de C.V. ("Chinantla"), converting a previously non-binding memorandum of understanding into a documented commercial relationship. This EV Resources ore supply deal for Tecomatlán antimony processing plant in Mexico marks a material step in the Company's planned Proof-of-Concept antimony processing campaign.
The agreement brings together four elements EVR has been methodically assembling: a commissioned flotation circuit, a validated processing flowsheet, metallurgically tested high-grade ore, and now a binding long-term commercial supply framework. For investors tracking the Company's transition from explorer toward near-term producer, the announcement is presented as the clearest signal yet that the Tecomatlán hub model is moving from concept into execution.
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The Deal At A Glance
The agreement sits between EVR's Mexican subsidiary Stibcorp S.A. de C.V. and Chinantla, which operates approximately 8km from the Tecomatlán plant. That proximity is described as a deliberate advantage, with regional antimony producers across Puebla, Oaxaca and Guerrero currently facing alternative processing facilities located up to 1,200km away — a haulage burden that can erode the economics of smaller operations.
| Term | Detail |
|---|---|
| Agreement Type | Binding Ore Supply Agreement |
| Initial Term | Five years from execution date |
| Renewal | Automatic one-year successive renewals |
| Non-Renewal Notice | 90 days prior to expiry of current term |
| Volume Commitment | No minimum obligation; arises on each Purchase Confirmation |
| Pricing Mechanism | Benchmark-linked to international antimony price, adjusted for payable grade, treatment, refining, transport, moisture, impurities and penalties |
| Governing Law | Federal Laws and Commercial Code of Mexico |
The pricing structure ties each ore purchase to the prevailing international antimony benchmark, with adjustments for payable antimony grade determined through agreed sampling and assay procedures. Consequently, EVR's feedstock costs are designed to move in line with the same market conditions that determine the value of the concentrate it produces.
Why The Metallurgy Matters
Before entering into a binding commercial relationship, EVR put Chinantla ore through testing under its metallurgical programme. The results are reported to have supported the decision to secure a long-term supply arrangement.
| Processing Method | Antimony Recovery | Concentrate Grade |
|---|---|---|
| Gravity Concentration Only | 29.25% | 20.54% Sb |
| Flotation Testwork | 81.1% | 42.4% Sb |
The improvement from gravity concentration to flotation — more than doubling both recovery rate and concentrate grade — is cited as the reason EVR integrated both processing methods into the Tecomatlán flowsheet. Furthermore, Chinantla ore was the principal third-party feed source used throughout this metallurgical programme, meaning the plant has been designed around material the Company now has a binding agreement to receive.
Separately, EVR is progressing the acquisition of an initial 200-tonne high-grade Chinantla stockpile intended to provide feed material for the Proof-of-Concept processing campaign. This stockpile acquisition is described as a distinct commercial arrangement, separate from the five-year supply agreement.
Understanding Flotation Recovery
For investors less familiar with mineral processing, the 81.1% antimony recovery figure warrants explanation. Flotation recovery refers to the percentage of a target mineral — in this case antimony — that is successfully captured during processing rather than lost to tailings, the waste material remaining after valuable minerals have been extracted.
A recovery rate above 80% is generally regarded as strong performance for antimony flotation, particularly when applied to third-party ore that may carry variable characteristics. The result carries two key implications for investors:
- It suggests the ore is compatible with EVR's plant. Chinantla ore has been physically processed through the Tecomatlán flowsheet under testwork conditions rather than modelled theoretically.
- It may support the processing margin. The Tecomatlán model is built around the value differential between the price paid for raw ore and the value realised from the resulting concentrate. Higher recovery means more payable antimony captured per tonne processed, which can support that differential.
A 42.4% Sb concentrate is considered a commercially relevant product grade for antimony, potentially of interest to buyers seeking supply outside Chinese-controlled channels — a dynamic that has grown in significance following Chinese export controls introduced in 2024.
Building The Feedstock Network: From MOUs To Binding Agreements
The EV Resources ore supply deal for Tecomatlán antimony processing plant in Mexico is the first of EVR's regional feedstock MOUs to be converted into a binding commercial relationship. The Company holds additional non-binding MOUs across the region, with volumes contemplated under those existing arrangements said to represent more than 50% of Tecomatlán's nameplate capacity — referring to the facility's designed processing capacity under normal operating conditions.
| Stage | Status |
|---|---|
| Regional feedstock MOUs signed | Completed, volumes >50% of nameplate capacity contemplated |
| Tecomatlán flotation circuit commissioned | Completed |
| Integrated gravity + flotation flowsheet established | Completed |
| Chinantla ore metallurgically tested | Completed, 81.1% recovery, 42.4% Sb concentrate |
| First binding five-year supply agreement executed | Completed, this announcement |
| 200-tonne Chinantla stockpile acquisition | In progress |
| Remaining plant integration and commissioning | In progress |
| Proof-of-Concept processing campaign | Planned next step |
| Conversion of remaining MOUs to binding agreements | Ongoing |
| Los Lirios maiden JORC Mineral Resource | Advancing in parallel |
Executive Chairman Shane Menere commented:
"This is an important milestone because we are progressively bringing together every component required for the Tecomatlán Proof-of-Concept campaign: the plant, the processing flowsheet, tested high-grade ore and now our first binding long-term commercial supply relationship. Converting Chinantla from an MOU into a five-year binding commercial relationship is another important step in moving that model from concept into execution."
"EVR is funded through the Proof-of-Concept phase to demonstrate our capability to produce a marketable antimony concentrate. Beyond that milestone, our objective is to work with a select strategic and offtake partner that shares our ambition to build a secure and scalable North American antimony supply chain."
The North American Platform Taking Shape
The Chinantla agreement sits within a broader structure EVR is assembling across Mexico and the United States. However, it is the Mexican processing and regional supply arm that currently represents the most immediate activity.
Mexico — processing and regional supply
- Tecomatlán Processing Plant serves as the regional hub, with a commissioned flotation circuit and established flowsheet
- Chinantla, 8km away, is now the first binding ore supplier under a five-year agreement
- Los Lirios Antimony Project, approximately 50km from Tecomatlán and 70% owned, is being advanced toward a maiden JORC Mineral Resource as a potential future proprietary feed source
United States — direct market exposure
- Dollar and Milton projects in Nevada are 100%-owned US antimony assets
- These are positioned to complement the Mexican processing strategy with direct exposure to the US critical minerals supply chain
What's Next: Immediate Priorities
EVR has outlined a set of near-term milestones as the EV Resources ore supply deal for Tecomatlán antimony processing plant in Mexico continues to shape the Company's near-term strategy:
- Complete acquisition of the 200-tonne high-grade Chinantla stockpile for Proof-of-Concept feed
- Complete remaining plant integration and commissioning activities at Tecomatlán
- Commence the Proof-of-Concept campaign processing bulk sample material through the flowsheet
- Continue converting additional regional feedstock MOUs into binding commercial supply arrangements
- Develop the broader regional antimony feedstock network around Tecomatlán
- Progress the maiden JORC Mineral Resource at Los Lirios as a potential future proprietary feed source
Investment Thesis: Why This Announcement Moves The Needle
Several elements of this announcement are worth isolating for investors assessing EVR's position.
Has Validation Risk Been Reduced?
Indeed it has. The ore intended to feed the Proof-of-Concept campaign has already been processed through the Tecomatlán flowsheet under testwork conditions. The plant exists, the flowsheet is established, the ore has been tested, and a commercial supply agreement is now in place.
Does The Hub Model Have A Commercial Foundation?
Converting the first MOU into a binding agreement establishes a commercial framework and pricing structure that subsequent supply relationships can potentially be modelled on. Each additional conversion may help de-risk the feedstock diversification strategy.
What About Proximity And Cost Advantages?
An 8km haulage distance compared with up to 1,200km to the nearest alternative processing facility represents a potential structural cost advantage for both EVR and regional ore suppliers. In addition, EVR has confirmed it is funded through the planned Proof-of-Concept phase, providing investors with clarity on near-term capital requirements.
How Does Antimony Market Context Factor In?
Antimony has been designated a critical mineral by the US, EU and Australian governments. Chinese export controls introduced in 2024 have tightened supply available to Western buyers. Consequently, Tecomatlán concentrate is positioned by the Company for buyers seeking supply outside Chinese-controlled channels — a strategic alignment with evolving geopolitical dynamics.
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Glossary Of Key Terms
Antimony (Sb): A metalloid element designated as a critical mineral by the US, EU and Australia, used in defence applications, energy storage, flame retardants and semiconductor manufacturing.
Flotation: A mineral processing technique that separates target minerals from waste rock using differences in surface chemistry, where air bubbles attach to target mineral particles and float them to the surface for collection.
Recovery Rate: The percentage of the target mineral successfully captured during processing.
Concentrate Grade: The percentage of the target mineral contained in the final processed product.
Proof-of-Concept (PoC): An initial processing campaign designed to demonstrate that a plant and flowsheet can process real ore and produce a saleable product under operational conditions.
JORC Mineral Resource: A publicly reported estimate of the quantity and grade of mineralisation with reasonable prospects for eventual economic extraction, prepared in accordance with the Australasian JORC Code.
MOU (Memorandum of Understanding): A non-binding agreement establishing intent to proceed with a commercial arrangement, typically converted into a binding contract upon agreement of final terms.
Purchase Confirmation: Under the Ore Supply Agreement, the document issued by Stibcorp that triggers a binding obligation for a specific parcel of ore, establishing volume, pricing and delivery terms.
Nameplate Capacity: The designed or rated processing capacity of a facility under normal operating conditions.
Key Takeaway:
The EV Resources ore supply deal for Tecomatlán antimony processing plant in Mexico reflects a methodical approach to building an integrated North American antimony supply chain. With its Tecomatlán plant commissioned, its processing flowsheet tested on real ore, and its first binding five-year feedstock agreement now executed, EVR has taken further steps toward a Proof-of-Concept campaign. The conversion of additional feedstock MOUs and the commencement of that campaign represent near-term developments for investors to monitor.
Ready to Learn More About EV Resources' Antimony Strategy?
EV Resources (ASX: EVR) is methodically assembling every component required to advance its Tecomatlán processing hub toward a Proof-of-Concept campaign — with a commissioned flotation circuit, a validated flowsheet, metallurgically tested ore, and now its first binding five-year commercial supply agreement in place. For investors looking to understand the Company's near-term milestones, its regional feedstock strategy, and its broader North American antimony platform, visit the EV Resources website to find out more.
