PERTH (miningweekly.com) – Iron-ore junior Mount Gibson Iron has terminated an offtake agreement with Xinyu Iron and Steel Group after the Chinese firm failed to comply with the terms of the agreement.
The offtake agreement would have seen Hinyu purchase about one-quarter of the first year’s available production from the Iron Hill iron deposit, in Western Australia, over a period of 12 months.
Mount Gibson said on Monday that the company was free to place all production previously committed to Xinyu with alternative customers, with the Australian junior also reserving the right to pursue Xinyu for any resulting losses.
The Iron Hill mine is located about 3 km from the now-depleted Extension Hill operation and will only require between A$2-million and A$3-million to develop, as it will use the company’s existing mine facilities and logistics arrangements.
Based on the current development schedule, Mount Gibson expects the project to contribute 400 000 t to 500 000 t of ore to product sales for 2016/17, with total life-of-mine product sales expected to be between 5.5-million and 6-million tonnes through to late 2018, when production will likely be completed.