Metro Mining Limited has signed a binding off-take agreement for China’s Xinfa Group to purchase around half the Bauxite Hills Project production for the first four years of operation.
Bauxite Hills is located 95km north of Weipa on western Cape York.
Environmental approvals are under consideration with production planned to commence in May 2018.
Metro forecasts production of up to 4 million tonnes per annum from Bauxite Hills, with a mine life of 13 years. The binding off-take agreement with Xinfa includes one million tonnes in the first year and two million tonnes per annum for the following three years.
The Xinfa Group is one of the largest integrated aluminium companies in China with significant refining and smelting operations in Shandong, Guangxi and Xinjiang Provinces. Xinfa is currently a 4.3 per cent shareholder in Metro.
The agreement guarantees sales during the most important part of the operation and will underpin project financing efforts, Metro CEO Simon Finnis said.
“This agreement shows the strong relationship and exceptional good faith between Xinfa and Metro Mining. It is a strong endorsement of the quality of our bauxite and shows the confidence Xinfa has in our progress towards production,” Mr Finnis said.
Mr Finnis says signing the agreement is the latest significant event in a year of great progress for Metro. Other major achievements have included:
- Receiving $8.9 million funding from UK based Greenstone Resources, with an additional US$20 million of follow-on equity support available for construction of the Bauxite Hills project.
- Acquisition 0f 39 per cent of the shares of Gulf Alumina, who hold an adjacent bauxite project with a similar reserve size as the Bauxite Hills project;
“Our focus is now on completion of the Definitive Feasibility Study (DFS), achieving permitting approvals and undertaking pre-development work,” Mr Finnis said.