Astron signs first-phase funding deal for Donald
PERTH (miningweekly.com) – Mineral sands developer Astron Corporation on Monday announced that its subsidiary Donald Mineral Sands had entered into a framework agreement with China Machinery Engineering Corporation (CMEC) to fund the first stage of the Donald project, in Victoria.
The company reported that the framework agreement set out the parties' intentions to agree on an engineering, procurement and construction (EPC) contract for the supply and installation of equipment for the Donald project, and to assist in funding the project.
CMEC would be appointed as the EPC contractor for the first phase of the project, which would require project funding of some $100-million, of which CMEC would provide 85% in the form of seller’s credit from a Chinese bank, or other channels. The balance of the funding would be provided by Astron.
A 2013 prefeasibility study estimated that the Donald mineral sands project would require a capital investment of some $518-million to achieve its full production rate of 950 000 t/y. The project would be ramped up in phases, with initial production set at 475 000 t/y of heavy mineral concentrate.
Over the expected 31-year project life, Donald would generate yearly revenue of $740-million, with yearly operating expenses forecast at $223-million.
Astron told shareholders on Monday that while the framework agreement with CMEC was legally binding under Chinese law, it was subject to certain conditions, including Chinese regulatory approval, and a formal EPC contract, which would still be negotiated.
The two parties would work toward finalising the EPC contract by the end of July, and the funding arrangements within four months of the EPC contract being executed.
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