PERTH (miningweekly.com) – ASX-listed junior Magnis Resources has inked a binding term sheet with offtake partner China National Nonmetallic Minerals Industrial Limited Corporation (Sinoma) for $150-million in funding to advance the Nachu graphite project, in Tanzania.
The funding would cover the engineering, procurement, construction and finance of the Nachu project.
Magnis in December last year signed an 80 000 t/y binding agreement with vertically integrated Sinoma for graphite offtake from the Tanzania operation, which was followed by a 100 000 t/y agreement in place with China-based Sinosteel in January.
Magnis chairperson Frank Poullas said on Tuesday that securing a binding term sheet for financing the Nachu project placed the company in a strong position.
Sinoma was one of the largest integrated graphite companies in the world, with leading expertise in graphite process engineering and plant design, he stated.
“With the financial and technical muscle of Sinoma, along with our management team’s proven track record in bringing projects into production in Africa, the future looks very promising,” Poullas added.
The Sinoma term sheet was structured on the prefeasibility study and had a debt-to-equity ratio of 90:10 at commercially competitive rates. This translated to Sinoma’s portion of finance being $150-million, with Magnis’ share equating to $15-million.
The framework was structured on a 200 000 t/y graphite concentrate, and would see Sinoma deliver engineering goods and services, including mechanical, civil, electrical, instrumentation, piping specifications, construction drawings, construction and project management.
The funding was subject to the necessary government approvals.