MMG signs $1bn loan facility for Qld project
PERTH (miningweekly.com) – Prime Minister Julia Gillard was on hand when base metals miner MMG signed a $1-billion loan facility with the China Development Bank (CDB) to develop its Dugald River zinc/lead/silver project, in Queensland.
MMG said on Wednesday that the framework agreement set out a commitment from the CDB to provide the $1-billion loan over a term of 13 years.
The Dugald River project is one of the world’s largest known undeveloped zinc deposits, with the $1.5-billion project representing a major investment into Australia’s resources sector.
The project has a mineral resource of some 53-million tons, at 12.5% zinc, 1.9% lead and 36 g/t silver. The mine was expected to process an average of two-million tons a year of ore initially, to produce 200 000 t to 220 000 t of zinc concentrate, between 27 000 t and 30 000 t of lead in concentrate and around 900 000 oz of silver a year.
MMG would likely commission the project in 2015, with first concentrate expected by the end of the same year. The project was expected to have a mine life of more than 20 years.
MMG executive GM for business development Michael Nossal said the company was uniquely positioned to be part of a deepening partnership between Australia and China.
“We are very pleased to sign this framework agreement with China Development Bank and China Minmetals Corporation, in the presence of the Australian Prime Minister and Chinese Premier, as a demonstration of the strengthening relationship between our two countries.”
He further noted that the development of the Dugald River mine delivered on a commitment made by China Minmetals to the Australian government in 2009, when the MMG assets were acquired.
The CDB’s arrangement and underwriting of the financing for Dugald River was subject to further negotiations and the execution of a definitive loan agreement.
The financing arrangements would likely be completed by June this year, Nossal said.
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