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PERTH (miningweekly.com) – ASX-listed junior Image Resources has inked an agreement with Murray Zircon and its parent company Guandong Orient Zirconic to fast-track the development of the Boonanarring mineral sands project, in Western Australia.
The agreement covered a number of transactions, including Image acquiring a wet concentration plant and ancillary mining and processing equipment from Murray Zircon, which would also provide a A$4-million short-term loan facility to Image to be drawn down in full at the completion of the asset purchase.
Image would have the option to purchase Murray Zircon’s mineral separation plant, which it employed at its own Mindarie project in South Australia, for A$12-million.
In addition, Orient Zirconic would provide a $8-million prepayment loan facility to Image, available for drawdown following the production of the first 20 000 t of heavy mineral concentrates from the Boonanarring operation, with Orient Zirconic also agreeing to purchase 90% of all zircon products produced at Boonanarring and subsequent deposits.
Image, in return, would issue Murray Zircon some 42% of the company’s expanded share capital, and if a decision to mine was reached within a two-year period, would issue the company a further 5% of the expanded share capital of Image, resulting in Murray Zircon becoming a significant shareholder in Image.
Upon the completion of the transaction, Murray Zircon’s current CEO, Patrick Muntz, would become Image’s MD, while the Image board would be reconstituted to comprise three directors nominated by Image, three directors nominated by Murray Zircon, and the appointment of an independent chairperson.
Image CEO Collis Thorp said on Tuesday that the execution of the final binding agreement with Murray Zircon and Orient Zirconic was a significant milestone for the company.
“Once completed, these transactions provide a pathway to achieving production from our flagship Boonanarring project, and we look forward to working with Murray Zircon and Orient Zirconic in progressing to that point.”
The Boonanarring project would involve an opencut mineral sands operation, mining at a rate of 3.3-million tonnes a year over a projected ten-year mine life. Yearly production from the mine was expected to average 89 000 t of ilmenite, 5 400 t of leucoxene, 9 000 t of rutile and 32 400 t of zircon for combined heavy minerals production of 135 900 t.