Metallica ropes in Chinese partner for HMS operation
PERTH (miningweekly.com) – ASX-listed Metallica Minerals on Friday executed a joint venture (JV) agreement with a private Chinese investor to develop its Urquhart Point heavy mineral sands (HMS) project, in Queensland, and to explore for other HMS and bauxite deposits on its tenements in Cape York.
Under the JV agreement, the Chinese firm would provide some A$7.5-million in funding, which would fully finance the construction and commissioning of the proposed Urquhart Point HMS project, based on capital expenditure of A$6.5-million and on the working capital requirements outlined in the project’s feasibility study.
Some 240 000 t/y of ore would be mined from a shallow openpit operation, to produce about 87 000 t/y of concentrate over a five-year mine life. The project currently has a proven and probable reserve of 1.18-million tonnes, at 9.5% heavy minerals.
Metallica MD Andrew Gillies said on Friday that the JV agreement was the catalyst for new mine development and exploration across all of the company’s Cape York HMS and bauxite projects.
In anticipation of Foreign Investment Board approval, the JV would immediately finalise detailed planning for the development of Urquhart Point, Gillies added, secure in the fact that A$7.5-million of non-diluting project funding would be available for the company’s assets.
Production for Urquhart Point has been slated for within the next 12 to 18 months.
“Significantly, the real long-term potential is in the bauxite and HMS offerings in the regional tenements north of Urquhart Point, where we have a suite of high-priority targets ready to drill. This JV funding means we have sidestepped dilution to shareholders and the ongoing difficult capital raising hurdles for junior resource companies,” Gillies added.
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