Rex Minerals has moved a step closer to production at its Yorke Peninsula copper prospect, signing a construction and financing memorandum of understanding with a Chinese mining group. The announcement today follows a trading halt in Rex Minerals shares yesterday.
Shares in the local minerals explorer jumped 54 per cent to 39 cents.
The deal comes after reports that Rex executives were in talks with multiple international consortiums to provide a fixed price, turn-key contract to build the plant and provide financing support to advance the Hillside project near Ardrossan. Rex’s share price has been in free-fall in recent months, down from a high of $3.00 to a low now of 24 cents, closing yesterday at 25 cents.
“Rex Minerals Ltd is pleased to announce that it has signed a non-binding Memorandum of Understanding with China Nonferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd (NFC) and its Australian based subcontractor Arccon (WA) Pty Ltd as part of the engineering, procurement and construction and overall financing plan for the development of the Hillside Project,” the company told the stock exchange this morning.
Managing director Mark Parry said the prospect of a long term deal with the Chinese group was a move in the right direction.
“We are extremely pleased to start what we consider to be a long term relationship with NFC from China,” he said. “NFC is a major highly experienced construction company with a history of successfully building processing plants around the globe.
“We believe NFC’s experience and the link with an Australian construction company in Arccon, will be an important formula for success as we advance the Hillside Project towards production.”
Parry said the next step would be to secure a funding model.
“With greater certainty about the timing and quantum of debt funding, Rex is now well positioned to continue commercial negotiations with a range of parties to secure the balance of the funding.
Stay informed, daily
“To date these include potential iron ore off-take partners, parties seeking to provide funding to get long term access to copper supply, and other investors actively seeking involvement in Hillside including potential JV partners at project level.
“The purpose of this MOU is to provide a framework for co-operation for establishing the cost and programme for delivery of the Hillside Project. In addition the MOU establishes the procedure to develop and submit a binding quote to Rex for the finalisation and execution of EPC and Financing Terms Sheets.”
The announcement outlines a timetable of progression towards a final deal with execution of the EPC contract expected by September/October 2013 and mobilisation of engineering and procurement teams by November 2013.
The Hillside project is 12km south of Ardrossan on the Yorke Peninsula and has been widely touted as one of many potential large-scale copper-gold projects within Rex’s 100 per cent owned exploration licences on the Yorke Peninsula.
Want to see more stories from InDaily SA in your Google search results?
- Click here to set InDaily SA as a preferred source.
- Tick the box next to "InDaily SA". That's it.
