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Cairn Hill JV partner placed in administration

Cairn Hill JV partner placed in administration

Photo by Bloomberg

19th June 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – The share price of ASX-listed IMX Resources fell by 45% on Thursday after its joint venture (JV) partner in the Cairn Hill iron-ore mine, in South Australia, appointed an administrator.

IMX holds a 51% interest in the Cairn Hill operation, with Termite Resources holding the remaining interest.

The appointment of an administrator for Termite Resources came as a result of the recent decline in iron-ore prices.

All contractual liabilities for the Cairn Hill mine were the obligation of Termite, except for a guarantee provided by IMX under the port handling services contract with Flinders Ports. This guarantee is capped at A$3-million.

IMX said on Thursday that it had held preliminary discussions with Flinders Ports and was confident that a mutually acceptable solution could be reached, should there be any claim under the guarantee.

In April this year, the Cairn Hill JV partners approved the Phase 2 development of the project, which would initially comprise the mining of two new openpits to the east of the current Pit 1, with production of about one-million tonnes of product.

Initial production from Pit 3, located immediately to the east of Pit 1, would be crushed and shipped as direct shipping ore, while the balance of Phase 2 material would require crushing and dry magnetic separation to produce an intermediate product.

The Phase 2 extension formed part of a broader strategic vision to extend the life of the Cairn Hill mine.

IMX told shareholders that the decision to place Termite Resources under administration would have no impact on its own exploration programmes currently being undertaken at the Ntaka Hill nickel sulphide project, or the Kishugu gold prospect, both located in Tanzania.

Additionally, IMX would also continue to hunt for a JV partner for its Mount Woods magnetite project.

IMX shares were trading at a low of 2.2c a share on Thursday, down from an opening price of 3.6c a share. On Wednesday, the company’s stock closed at 4c a share.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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