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PERTH (miningweekly.com) – The board of junior Sphere Minerals on Thursday approved the $900-million development of the Askaf North iron-ore project, in Mauritania.
The board approval followed a confirmation of key fiscal terms by the Mauritanian government, and the conclusion of contractual agreements for the provision of port and rail services for the project.
The Askaf North deposit has a total resource of some 404-million tonnes, grading 36% iron, and was expected to deliver about seven-million tonnes a year. The port and rail service agreement would allow Sphere to transport this product from the mine site, and load it on ships at the Port of Nouadhibou.
First production from Askaf North was expected in early 2017.
Meanwhile, Sphere also announced on Thursday that its independent directors had approved an increase in a loan agreement with parent company GlencoreXstrata’s Australian holding company, for a maximum drawdown of $186-million to fund the ongoing project work in Mauritania.
The initial loan agreement had been for $80-million, and carried an interest rate of 12% a year, plus a 1% yearly commitment fee on the undrawn amount of the facility.
Sphere told shareholders that the remainder of the funding required to develop Askaf North would be sourced from further loans or rights issues.