PERTH (miningweekly.com) – ASX-listed Korab Resources has inked a memorandum of understanding (MoU) with a representative from the Chinese steel industry, which could result in funding for the development of the Winchester magnesite mine, in the Northern Territory.
The MoU was signed between Korab subsidiary AusMag and Hong Wang, who represents interests associated with the Chinese steel industry.
Under the MoU, the parties would explore funding for AusMag to allow for the development operation and the start of production of magnesium carbonate from the Winchester mine.
The agreement would also look at offtake agreements with Chinese steel mills and the listing of AusMag in Hong Kong or Shanghai, or another suitable exchange.
It was envisaged that the funding for the development of the Winchester mine would be provided as seed capital by the parties associated with the Chinese steel producers.
A January prefeasibility study estimated that the Winchester project would require a capital investment of A$4-million and considered various capacity levels, ranging from a 250 000 t/y to a one-million-tonne-a-year run-of-mine capacity.
Operating costs for the staged operation would range between A$29/t for the 250 000 t/y operation, to A$21/t for the one-million-tonne-a-year operation, with production ranging from 200 000 t/y of coarse saleable magnesite to 800 000 t/y of coarse saleable magnesite.
The project’s ultimate output would depend on offtake or long-term sales agreements.
In November, Korab signed a heads of agreement with an unnamed party for the offtake of 1.5-million tonnes of magnesium carbonate rock from Winchester.