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Cabot and Pioneer Reach an Offtake Agreement


Jun. 26 2018, Updated 11:07 a.m. ET

Cabot and Pioneer agreement

On June 20, Australia-based Pioneer Resources Limited announced its agreement with Cabot Specialty Fluids, a wholly owned subsidiary of Cabot Corporation (CBT) to buy 100.0% of the cesium ore extracted from the Sinclair Zone Caesium Deposit. In order to fund the mining operations, a $4.8 million loan facility is also included in the offtake agreement.

Alex Rees, VP and General Manager of Cabot Specialty Fluids, said, “We are pleased to commence our relationship with Pioneer for supply of pollucite to Cabot and look forward to a positive continuing relationship. Furthermore, we are excited to partner with Pioneer on their Sinclair Mine project and support this landmark development. The Offtake Agreement will augment Cabot’s pollucite supply and complement the active supply projects at our TANCO facility in Lac du Bonnet, Manitoba, Canada.”

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Stock performance

Cabot’s (CBT) stock price declined 2.2% and closed at $62.45. Despite the decline in its stock price, Cabot traded 4.0% above the 100-day moving average price of $60.02, which indicates an upward trend in the stock. 

On a year-to-date basis, CBT stock has gained 1.4%, while Albemarle (ALB) and PPG Industries (PPG) have declined 26.9% and 9.8%, respectively. In contrast, Celanese (CE) has gained 6.8%. 

Analysts are bullish on CBT stock and have recommended a target price of $72.30, which implies a return potential of 15.8% from its June 22 closing price.

Investors can hold Cabot indirectly by investing in the First Trust Materials AlphaDEX Fund (FXZ). FXZ has invested 0.7% of its portfolio in Cabot on June 22.


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