Victory Metals (ASX:VTM) signed a non-binding memorandum of understanding (MOU) with Sumitomo for a potential long-term offtake agreement, according to a Tuesday filing with the Australian bourse.

Under the MOU, Victory aims to supply Sumitomo with 30% of its annual production of mixed rare earth carbonate from its North Stanmore heavy rare earth project in Western Australia, the filing said.

The initial offtake term is set for five years, with an option for a five-year extension, with pricing linked to market rates for mixed rare earth carbonate products and adjusted for total rare earth oxide content.

Both companies have agreed to negotiate a binding term sheet by Oct. 31, 2025, the filing added.

Shares of the company rose 5% in recent Tuesday trade.

Price (AUD): $0.42, Change: $+0.02, Percent Change: +5.00%