Nextsource Materials Inc (NSRCF)

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What is an Offtake Agreement?
Amanda Kay - September 17th, 2018

Generally, offtake agreements are negotiated prior to mine construction; they help assure producers that there is a market for the material they plan to produce. That is beneficial for a number of reasons — most obviously, it means the company won’t have to worry about being able to sell the metal it produces.

Additionally, having an offtake agreement tends to make it easier for producers to secure the necessary financing to move forward with mine construction. Lenders and investors are more likely to have confidence in a project if they know that companies are already lining up to buy the metal it will produce.

Buyers will also sometimes provide producers with money to advance their projects when an agreement is created. However, that is not always the case.


https://investingnews.com/daily/resource-investing/what-is-an-offtake-agreement/