Rex signs EPC and financing deal
PERTH (miningweekly.com) – Junior miner Rex Minerals has signed a memorandum of understanding (MoU) with China Nonferrous Metals Industry’s Foreign Engineering and Construction Company (NFC) to assist in financing and developing the Hillside copper project, in South Australia.
The MoU provided a framework for cooperation to establish the cost parameters for delivering the Hillside project, said MD Mark Parry, and established the procedure to develop and submit a binding quote for the final execution of an engineering, procurement and construction (EPC) contract and financing term sheets.
Under the terms of the MoU, NFC would be appointed as the EPC contractor for the project, and would facilitate debt funding for the project through major Chinese banks, based on 70% of the EPC contract turnkey costs, with an indicative amount set at $550-million.
“With greater certainty about the timing and quantum of debt funding, Rex is now well positioned to continue with commercial negotiations with a range of parties to secure the balance of the funding,” said Parry.
“To date, these include potential iron-ore offtake partners, parties seeking to provide funding to get long-term access to copper supply, and other investors actively seeking involvement in Hillside, including potential joint venture partners at project level.”
An indicative timetable for the Hillside project envisaged the start of construction during the first half of 2014, with final financing in place by September or October 2013.
The prefeasibility study (PFS), which was completed last year, found that the Hillside project could deliver some 70 000 t/y of copper, over a 15-year mine life.
The PFS estimated that the Hillside project would require a capital investment of some A$900-million, with the bulk of the preproduction capital spent on the construction of a 15-million-ton-a-year processing plant, as well as various surface infrastructure.
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