PERTH (miningweekly.com) – The share price of mineral sands developer MZI Resources rose on Thursday on news that the company had terminated a deferred payment and royalty with Stirling Resources, and had instead reached a settlement.
In 2013, MZI had agree to pay A$1-million as a deferred payment to Stirling, no later than the end of June next year, with an interest at 10% payable at six monthly intervals. MZI at the time also agreed to pay Stirling a 0.5% gross revenue royalty on production from the Keysbrook project area.
MZI on Wednesday announced that it had now executed a settlement agreement with Stirling, under which it would pay A$1.6-million in a full and final settlement, with no further obligations to Stirling.
The ASX-listed company said that the settlement payments to Stirling would have a positive impact on the Keysbrook project by reducing the project’s commitments in respect of the deferred payment and royalty deed.
The Keysbrook project would require a capital investment of A$61.9-million and was slated to produce 91 000 t/y of product from 110 000 t/y of dry heavy mineral concentrate, over a five-and-a-half-year mine life. The project development was likely to take about 12 months, and first production was planned for the December quarter of 2015.
MZI shares were trading at a high of 26c a share on Wednesday, up from an opening price of 25c a share.