Binding Offtake Agreement
Amaero International (ASX:3DA), an ASX-listed company focused on high-value refractory, specialty alloy and Ti-64 powder production for additive manufacturing of mission-critical components for the defence, space and aviation industries announces that it has entered into a binding offtake agreement for the supply of C103 AM powder. The counterparty to the agreement is a leading and deeply resourced additive manufacturer of C103 and refractory alloys for the defense and space industries. The company has industry leading technical and applied research capabilities operating out of multiple locations in the United States, and collaborates with U.S. Department of Defense (“DoD”) funded laboratories, as well as prime defense contractors.
Under the terms of the agreement, the supply of the C103 AM powder is conditional on Amaero’s C103 AM powder being qualified to the counterparty’s specifications. There are no other material conditions precedent to the supply of the C103 AM powder. Amaero and the counterparty have agreed to collaborate throughout the qualification process, which Amaero expects will commence in the coming months.
Only after qualification is achieved is the counterparty required to take 2.25 tonnes of Amaero C103 AM powder at a fixed price. Subject to achieving qualification, Amaero expects that 0.25 tonnes will be shipped in late CY2024 with the remaining 2 tonnes expected to be shipped in CY2025. If Amaero delivers the contracted 2.25 tonnes of C103 AM powder, which as noted above is first subject to Amaero’s powder being qualified by the counterparty, the revenue would be material. Amaero has previously stated to the market that it expects to achieve breakeven operations in CY2025 and the revenue contribution from this agreement is reflected in expected revenue mix.
Following supply of the initial 2.25 tonnes, there are additional opportunities for further supply of C103 AM powder for the term of the agreement, however, there is no commitment from the counterparty to take a minimum amount of C103 AM powder.
If qualification of Amaero’s C103 AM powder is achieved, the agreement will run five (5) years. Either party may terminate the agreement for material breach by the other party, the insolvency of the other party or by mutual agreement.
Amaero is very gratified by the vote of confidence from this customer in Amaero’s ability to complete the commissioning of its first atomiser and to manufacture powder that meets the customer’s specifications. Amaero understands that its investors would like to hear more details about this agreement; however, it would be imprudent to provide further details until Amaero successfully qualifies C103 AM powder to the customer’s specifications.
Hank Holland, Amaero’s Chairman and CEO, said:
“This is a very important milestone for Amaero. Amaero aspires to be the largest U.S. domestic producer of C103 and specialty alloy AM powders and to be the most responsive, agile producer. In order for additive manufacturing to achieve its potential, it’s imperative that we stand up an alternative U.S. domestic supplier of C103 and specialty AM powder. Time is of the essence. There must be a sense of urgency to collaborate with and to assist DoD-funded laboratories and prime defence contractors to advance hypersonic and strategic missile programs from the development and demonstration phase to the production phase. The alignment and collaboration will be an important development for demonstrating manufacturing readiness and for advancing the insertion of additive manufacturing into the most strategic and most critical defence and space applications.”
Placement
Amaero has raised $20 million through the placement of the New Shares to eligible institutional investors (Placement). The Placement was conducted at a fixed price of $0.33 per New Share. The Placement price reflects an 11% discount to prior closing price; a 9% discount to 5-day VWAP and a nil discount to 30-day VWAP.
Hank Holland, Amaero’s Chairman and CEO, commented:
“I’m pleased to share that we received bids from investors in excess of the Placement amount including cornerstone investments from a U.S.-based internationally respected mutual fund, a top tier Australianbased global institutional asset manager and a leading Sydney-based investment management firm. As Amaero’s largest shareholder, I’ve often commented about the importance of attracting sophisticated, long-term shareholders to the registry and the addition of these institutional investors is an important affirmation of our progress. We have worked very hard over the past 18 months to re-position Amaero to be a valued and integral stakeholder in a generational opportunity – the re-shoring to the U.S. of critical industrial capabilities. In the coming months, the executive team will be relentlessly focused on commissioning the first atomiser in Tennessee and commencing powder production. Exciting days ahead.”
About us:
Amaero International Limited is an ASX-listed company focused on high-value refractory, specialty alloy and Ti-64 powder production for additive manufacturing of mission-critical components for the defence, space and aviation industries.
Contact details:
Jane Morgan
jm@janemorganmanagement.com.au