Copper-gold explorer R3D Resources (ASX: R3D) has secured Kanins International as the sole distributor and agent for technical-grade copper sulphate from its Tartana heap leach crystallisation plant in north Queensland.

The initial three-year offtake agreement is based on first production in December at a rate of 200 metric tonnes per month, ramping up within the first year to 500mt per month.

R3D aims to reach an annualised run rate 6,000mt of copper sulphate within the first year of Tartana’s operation, following the plant’s $1.4 million refurbishment.

Under the agreement, Kanins will purchase 100% of the technical grade copper sulphate produced by the company.

In March, the company referred to global market opportunities for copper sulphate in light of the war on Ukraine.

“The current conflict in Ukraine has placed constraints on the supply of copper sulphate worldwide and is likely to facilitate the placement of our future production to customers wishing to diversify their supply sources,” it said.

Kanins is a major international supplier of metallic salts and holds long-term copper sulphate agreements with customers within global industrial, animal feed, agricultural and aquacultural markets.

Historically, Kanins was the exclusive distributor and agent for Solomon’s Copper Australia which was the brand used by the previous owners of the Tartana operation, which operated from 2004 to 2018.

The project was acquired by Tartana in 2018.

In July 2021, Tartana was acquired by R3D in a reverse takeover, funded by a $4.25 million initial public offering prior to its ASX listing.

R3D said the offtake agreement with Kanins underpins the re-start of the Tartana plant and provides confidence in revenue generation at copper prices determined by the London Metals Exchange.

The current LME copper price sits at US$7,450 per tonne.

Copper sulphate can attract approximately 25% of the copper price, and is sold at its copper weight value plus a premium.

Kanins will sell the copper sulphate produced by R3D under its own brand.

The companies have agreed to separately explore the potential to supply agricultural markets with feed-grade copper sulphate.

In October, R3D appointed experienced company director and entrepreneur Jihad Malaeb to the role of chairman of the board.

Mr Malaeb has been a director of the company since June and is a material shareholder, having participated in capital raisings earlier this year.

In addition to his capacity as chairman, he will provide management and advisory services to R3D in support of the Tartana plant restart and other activities.

Mr Malaeb was until recently a director of Critical Resources (ASX: CRR) where he led a significant transformation of the company as both a director and significant shareholder – taking the share price from $0.01 to over $0.11 at its peak earlier this year.

Mr Malaeb has agreed to provide the company with a $500,000 working capital loan in the form of a loan note to help fund the refurbishment.

Subject to shareholder approval, the note will become convertible at a price of $0.15, representing a premium of more than 85% to the closing price of R3D shares on 19 October.

R3D has also recently announced a significant copper resource upgrade at Tartana with a total indicated and inferred resource standing at 2.27Mt at 0.5% copper for 11,265t of contained copper – a four-time increase in the total supergene copper resource.

“This new four-times increase in total supergene copper resources generates confidence in our ability to establish a copper sulphate pentahydrate operation with a minimum five year life if leach test work being conducted now on this mineralisation returns positive levels of leachable copper” the company said.