Bump in the road for Rex Minerals plan
South Australian minerals explorer Rex Minerals has moved to reassure shareholders after a major engineering supplier went into voluntary administration.
Rex and its preferred engineering procurement construction (EPC) contractor, NFC of China, announced a fixed price turnkey contract early last month.
News emerged of problems with the EPC subcontractor 10 days ago, prompting concerns on investor forums.
Today, Rex said it was looking at alternatives.
“Whilst it is disappointing that Australian engineering group Allmine, the parent company of Arccon that was subcontracting to NFC has been placed in administration, a number of alternatives exist,” the company said in a statement to the stock exchange. “To maintain its options and flexibility, Rex and NFC will hold discussions with other potential Australian subcontractors.”
Rex Minerals also released an updated production schedule for the first 10 years, should the mine proceed to production.
“The larger Ore Reserve and strong cash flows expected from the new production plan are a huge boost to our funding plans at Hillside,” Rex’s managing director Mark Parry said.
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“We continue to progress the debt funding package associated with a fixed price construction contract to the level of US$550 million and expect that the remainder of our funding will come together on the strength of our feasibility study results.
“We have now passed many important milestones with improvements to the Ore Reserve, production profile and cash flows associated with Hillside.
“The final elements of the Bankable Feasibility Study are now coming together and we continue to find cost and operational improvements to the project.
“We look forward to providing further detail as the Bankable Feasibility Study and financing is finalised later this year.”
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