Victory Metals Limited (ASX: VTM) (“Victory Metals” or “Company”) has signed a non-binding Letter of Intent (LOI) with Sumitomo Corporation (“Sumitomo”). The agreement builds on the Memorandum of Understanding signed in December 2024 and marks a stronger stage of cooperation. Sumitomo’s decision reflects confidence in the Company’s North Stanmore Heavy Rare Earth Project in Western Australia.
Framework of the Agreement
The LOI outlines an offtake framework for the Company’s mixed rare earth carbonate (MREC) from the North Stanmore Project. Under the LOI, the Company will supply up to 30% of its annual output or 1,000 tonnes of MREC each year. It also includes up to 50 tonnes of dysprosium-terbium(Dy-Tb) products annually. The initial term runs for 5 years. The Company’s pilot plant sales are expected to commence in 2027, ahead of commercial production.
The Company’s Chief Executive Officer and Executive Director, Brendan Clark, said, “This is an important and exciting milestone for Victory Metals. To advance from an MOU to a formal LOI with Sumitomo Corporation validates the strategic importance of the North Stanmore Project at the global stage.”
The LOI expires on 31 December 2028, giving both sides a clear timeline for cooperation.
Sumitomo Corporation: A Japanese Giant
Sumitomo is one of Japan’s largest and most diversified investment and trading groups. With more than 400 years of history, Sumitomo operates in 65+ countries. Sumitomo is listed on the Tokyo Stock Exchange and employs over 70,000 people worldwide. Sumitomo’s portfolio includes metals, minerals, energy, infrastructure, and advanced technologies. Sumitomo is a trusted partner to international governments and industry leaders. Sumitomo is known for securing vital resources for Japan and its allies. Sumitomo plays a central role in international supply chains for critical materials and advanced materials.
Figure 1: Sumitomo Corporation at a Glance
Mr Brendan Clark said, “Together, Victory Metals and Sumitomo have a shared vision to establish a secure, ethical, and Western-aligned supply chain for heavy rare earths, critical for renewable energy, defence, and advanced technologies. With Sumitomo’s global marketing reach and Victory Metals’ world-class resource, this partnership positions Victory Metals as a flagship Australian supplier into Japan, a nation leading the world in rare earth processing and innovation outside China.”
Japanese Interest Beyond Sumitomo
Victory Metals’ LOI with Sumitomo has noted interest from other Japanese trading houses. Other Japanese trading houses have continued positive discussions with the Company. This highlights Japan’s broader focus on rare earth supply diversification. Victory remains in discussions with multiple groups as demand for stable, non-Chinese supply sources grows.
Technical and Commercial Pathway
Victory Metals and Sumitomo will jointly decide the next key steps. Both companies will undertake technical evaluations, customer engagement, and pricing. Prices will align with prevailing market rates for MREC products. The LOI also allows pilot product testing and early sales. The Company and Sumitomo aim to transition to a long-term offtake once full production begins.
North Stanmore HRE Project Builds Momentum
The North Stanmore Clay-hosted Heavy Rare Earth (HRE) Project provides Victory Metals a strategic and competitive advantage.
In August 2025, the Company reported a robust mineral resource estimate (MRE). The resource totals 320.6 million tonnes. Of this, 176.5 million tonnes fall under the indicated category. The estimate highlights significant scandium, hafnium, and gallium potential.
Table 1: Mineral Resource Estimates Reported by the Company in August 2025 (Source)
The North Stanmore Project strengthens Australia’s role in the global critical minerals sector. With increasing demand for renewable energy, a secure supply is essential. The renewable energy market is expected to grow at a CAGR of 14.9% between 2025 and 2033. The market size will increase from USD 1.51 trillion (2024) to USD 4.86 trillion (2033). This is driven by the shift towards low-carbon alternatives and increasingly stringent environmental regulations.
Figure 2: Projected Growth of the Global Renewable Energy Market
Figure 3: Asia-Pacific Held the Largest Share in the Global Renewable Energy Market
The North Stanmore Project offers a pathway for Australia to deliver reliable materials into allied markets. Partnerships with global leaders like Sumitomo enhance both commercial and strategic value.
For Victory, this step signals more than resource development. It is about building global trust and market access. The LOI confirms Japan’s recognition of the project’s quality and potential. For Sumitomo, it provides an opportunity to lock in ethically sourced materials for high-tech industries.
Investor Outlook
Victory Metals is attracting strong investor attention with its strategic rare earths partnership. The Company’s share price sits at $1.335, reflecting a significant gain within its 52-week range of $0.310–$1.915. With a current market capitalisation of $180.50 million, Victory is well positioned to leverage growing global demand for heavy rare earths. The agreement with Sumitomo provides long-term market validation and enhances investor confidence. As binding offtake negotiations advance and pilot plant production approaches, the Company’s upside potential remains compelling for investors seeking exposure to the critical minerals sector.
