PERTH (miningweekly.com) – ASX-listed Hexagon Resources and fellow listed Mineral Resources have struck a joint venture (JV) agreement over the McIntosh graphite project, in Western Australia.
Under the agreement, the two companies will establish an unincorporated JV after Mineral Resources has completed its initial farm-in expenditure of A$300 000, with Hexagon holding a 49% interest, and Mineral Resources a 51% interest.
The JV, which is managed and funded by Mineral Resources, has been operational since the Hexagon shareholders approved the transaction in May this year under a heads of agreement.
Under the JV, Mineral Resources will be solely responsible for undertaking feasibility studies before October next year, starting activities on the project development before April 2020, and completing the project development activities to achieve commercial graphite production by April 2021.
Mineral Resources and its subsidiaries will also provide all mining, processing and logistical services to the McIntosh project under a life-of-mine project services agreement.
Hexagon MD Mike Rosenstreich said on Thursday that the signing of the JV agreement effectively de-risked the project for the company’s shareholders.
“To date, Mineral Resources has certainly been very active on the ground, with a major drilling programme recently completed, yielding a series of positive preliminary outcomes and approximately 17 t of drill core samples recovered.”
McIntosh is currently estimated to have a mineral resource of some 21.3-million tonnes grading 4.5% graphitic carbon.