PERTH (miningweekly.com) – Graphite hopeful IMX Resources has inked a memorandum of understanding (MoU) with two major Chinese firms over the possible development of its Chilalo project, in Tanzania.

IMX told shareholders on Monday that the MoU, which was signed with China Gold Investments and a subsidiary of China National Building Material Group Corporation, would allow the parties to start exclusive negotiations and due diligence to develop the Chilalo project.

“Attracting partners of the calibre of China Gold Investment and CN Docking is an excellent outcome and a testament to the market leading quality of the Chilalo product, in particular its expandability,” said IMX MD Phil Hoskins.

IMX and China Gold Investment have been involved in due diligence and negotiations for the past seven months, with China Gold Investment expressing interest to secure offtake from the Chilalo project.

China Gold Investment and CN Docking have formed a strategic partnership to jointly develop graphite opportunities.

“I am confident in the strength of the relationship IMX has developed with China Gold Investment over the past seven months, and it is a relationship I expect will secure Chilalo’s pathway to becoming a producing graphite asset and adding significant value for our shareholders,” Hoskins added.

The MoU period would expire at the end of July, and during this time the two Chinese firms would be unable to undertake discussions with other graphite companies or projects outside of China.

IMX would also be prevented from undertaking discussions with competing offtake and finance partners.

A recent prefeasibility study on the Chilalo project had estimated that a capital injection of $74-million would be required to support an average yearly production of 69 000 t of graphite concentrate, over a ten-year mine life.

Meanwhile, IMX on Monday also reported that it had secured about A$1.54-million in funding to complete the restructure of its Tanzanian asset portfolio, including the creation of a standalone ASX-listed company to house the Chilalo project.

The company placed more than 295.7-million shortfall shares, after raising some A$362 596 through an entitlement offer.

The majority of the shortfall shares were placed with existing shareholders; however, IMX noted that strong interest was also shown from brokers.

Hoskins said that the demand for the shortfall placement was reflective of the quality of the Chilalo project, and placed IMX on a strong footing to complete the restructure of the company’s asset portfolio.

“The support for the shortfall placement also validates the proposed restructure, which we believe is critical to realising the significant value in both the Chilalo project and our base and precious metals assets.”

The restructuring of the Tanzanian assets, which was announced in December last year, would see Chilalo become the primary asset of the newly listed vehicle. While the details of the asset restructure were still to be finalised, IMX had previously reported that it would consist of a scrip and cash payment by the new company to IMX, and an in-specie distribution of shares in the new venture to IMX shareholders.

IMX was hoping to complete the spin-off by April.