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Korab secures offtake at Winchester

5th November 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed junior Korab Resources has signed a heads of agreement (HoA) with an unnamed party for the offtake of 1.5-million tonnes of magnesium carbonate rock from its Winchester magnesite project, in the Northern Territory.

The offtake would cover the sale of 300 000 t/y of magnesite rock over a five-year period and could be extended further.

Korab noted that the HoA also covered the acquisition of an equity interest in its subsidiary AusMag in exchange for A$6-million, the provision of assistance with funding the capital and operational expenditure at the Winchester project, assistance with the development of the quarry and its operations, and assistance with marketing the output.

The detailed terms on which this assistance would be provided would be negotiated by Korab and its unnamed benefactor.

Korab added that the company was also in discussions with other interested parties regarding a possible stake in AusMag, as well as with other potential funders and magnesite buyers.

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.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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