Image source: © 2025 Krish Capital Pty. Ltd.

Highlights:

  • ZEO has signed a Binding Offtake Term Sheet with MSI for exclusive kaolin rights in China (including Taiwan and Hong Kong), South Korea, and Japan.

  • Committed minimum 5-year supply volumes exceed those in Zeotech’s recent AusPozz™ Project PFS.

  • Mining at the Toondoon Kaolin Project expected to begin in H1 2026, providing early cashflows.

Zeotech Limited (ASX:ZEO) has executed a binding kaolin direct shipping ore (DSO) offtake term sheet with Jiangsu Mineral Sources International Trading Co., Limited (MSI), granting the China-based trading company exclusive rights to market specified kaolin products across key Asian markets. The announcement saw Zeotech’s share price jump 20.3% to AUD 0.071 on the Australian Securities Exchange.

The agreement outlines MSI’s exclusive rights to market Zeotech’s kaolin and cosmetic kaolin DSO products in specified territories. It sets the framework for a binding offtake agreement scheduled for execution by 6 October 2025. The term sheet covers a committed supply of 800,000 tonnes of kaolin DSO and 150,000 tonnes of cosmetic kaolin DSO over an initial five-year period.

Zeotech confirmed that the agreed prices and minimum annual volumes are within 5% of the weighted average sale price adopted in its recent AusPozz™ Project Preliminary Feasibility Study (PFS). The commercial terms are intended to underpin and sustain operations at the Toondoon Kaolin Project, with anticipated early cashflows aiding the advancement of the AusPozz™ Project.

Under the agreement, mining activities at Toondoon are expected to commence in the first half of 2026, subject to financial close and completion of required approvals. If the condition is not met by 31 March 2026, the agreement will terminate. Termination clauses also apply for non-payment, material breaches, or insolvency events.

The Toondoon Kaolin Project, located about 20 kilometres south of Mundubbera, Queensland, covers over 28,000 hectares and is considered one of the highest-grade kaolin deposits in Australia under an approved mining lease. The site offers a simple open-cut operation with minimal overburden and is linked to the Port of Bundaberg via a 260-kilometre B-Double route. Zeotech owns 682 hectares of freehold land covering the mining lease and overlapping exploration permits, providing direct access to local infrastructure and room for future expansion.

This binding term sheet follows a non-binding Memorandum of Understanding signed in May 2025, which set the stage for potential offtake and distribution arrangements. MSI is recognised as one of the world’s leading independent bulk raw material trading companies, with established market access in Asia.

The company is progressing required approvals, including access roads, cultural heritage and environmental management plans. The early-stage cashflows from the kaolin sales are expected to position Zeotech as a significant global supplier of DSO kaolin and support its ambitions to produce high-reactivity metakaolin for low-carbon concrete applications.