The beaver50 is the dredge Amex Resources plans to buy and operate for the Mba delta in Ba. Photo: AMEX RESOURCES
By RACHNA LAL
Additional Information: PROACTIVE
INVESTORS
Amex Resources Limited has signed an off-take agreement for its Mba Delta Ironsands projects in Ba with an un-named global top 500 company.
This would be 500,000 tonnes per annum of Ironsands concentrate for a period of ten years.
An off-take agreement is between a producer of a resource and a buyer of a resource to purchase/sell portions of the producer’s future production.
Such agreements are normally negotiated prior to the construction of a facility such as a mine in order to secure a market for the future output of the facility.
Proactive Investors predicts the Perth-based Amex Resources’ shares should open higher on the deal, the price struck for the off-take is consistent with the Bankable Feasibility Study released in June 2012.
Agreement provisions
The agreement provides for first delivery within three months of commissioning of the project, which carries an indicated Joint Ore Reserves Committee (JORC) resource of 220 million tonnes at 10.9 per cent Iron.
Production of concentrate over the planned 20 year mine life is scheduled to be 500,000 tonnes in the first year, then 750,000 tonnes annually.
Plans are being considered for potential doubling of production to 1.5 million tonnes per annum after the first few years of operation.
Amex maintains a number of memorandum of understandings and expressions of interest for Ironsands tonnages that together exceed the unallocated balance of scheduled annual production.
It is confident further off take agreements will be reached as production draws near.
The first off-take deal is significant, particularly with a large global company, and renders near-term positive cash flow a reality.
The mineral
Ironsand, or titanomagnetite is a compound of iron, titanium and oxygen.
Unlike conventional hard rock magnetite, the traditional ore alternative to hematite, ironsand concentrate can be extracted at comparatively low cost.
Chinese steelmakers are particularly are interested in ironsand concentrates to blend with higher cost feedstock.
Works on ground
Meanwhile, Amex Resources has already started off with a number of works at its site in Lautoka.
It has completed detailed design for the marine wharf incorporating a main berth for 60,000 tonne Handimax vessels which will transport the magnetite sand product.
Amex Resources anticipates construction activities at the port to commence soon which will include dredging of the berth pocket to accommodate the large Handimax vessels.