KBL signs offtake deal for Mineral Hill product
PERTH (miningweekly.com) – ASX-listed KBL Mining has inked a $23-million metals purchase agreement with US-based Quintana Mineral Hill Streaming, under which the company will sell base metals, silver and gold produced from the Mineral Hill mine, in New South Wales.
KBL stated on Tuesday that the metal streamed to Quintana under the purchase agreement would account for 24.1% of the payable copper, lead, zinc, silver and gold produced at Mineral Hill until a specified delivery hurdle was reached for each metal, at which time the streaming percentage would reduce to 12.1%.
Under the current production schedule for the Mineral Hill mine, the delivery hurdle would be met within four years of production.
The future sales agreement would run over the full life of the mine.
The remaining quantities of metals produced at Mineral Hill will be sold by KBL at prevailing market prices.
The junior miner said that the $23-million payment would be drawn initially as $13.6-million, a portion of which would be used to repay the company’s A$12.6-million term debt owed to Capri Trading and due by March 16.
The balance of the funding would be drawn down in five subsequent payments against the achievement of specified development milestones related to an improvement programme at the Mineral Hill mine.
The programme would focus on open-pitting the Pearse gold deposit, installing a carbon-in-leach circuit to allow the processing plant to produce gold dore, adding a lead cleaner circuit and a zinc circuit, as well as other underground mining improvements, which would provide the mine a sound future.
KBL has been operating the refurbished processing plant at the Mineral Hill mine since October 2011 to produce copper concentrates. During the refurbishment period, plant upgrades were identified to increase the plant capacity from 200 000 t/y to 250 000 t/y.
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