ABX and Noble strike Tassie alliance

THE BOURSE WHISPERER: Australian Bauxite (ASX: ABX), through its wholly-owned subsidiary company ABx4 Pty Ltd, has signed a binding term sheet with Noble Resources International.

The deal grants Noble the exclusive global marketing rights in respect to ABX’s Tasmanian project, which includes the company’s first bauxite mine at Bald Hill, in consideration for Noble agreeing to enter into the Loan Facility and supportive marketing-off-take agreements.

Bald Hill is targeted for production in late 2014.

 

Locations of projects and infrastructure in Tasmania. Source: Company announcement

 

Noble Resources International director Will Randall said the alliance will accelerate ABx’s entry into the current strong bauxite market by providing finance and access to Noble’s global marketing network.

Under the new deal Noble will provide $6 million project finance, supported by a $2 million stand-by facility – if required – to expand the operations.

The $6 million and $2 million loan facilities are to each be repaid within two years from their first drawdown dates.

ABX explained it anticipates $1 million will be required for the first drawn-down by December 2014 when the project is planned to commence.

The company will provide a guarantee over its Tasmanian assets as security and Noble has been granted the first right of refusal on providing further funding in respect to the Tasmanian project.

Noble will be the marketing agent for all product for the life of the Tasmanian project, with open-book administrative, procedural and reporting arrangements with ABx4 so that sales will be mutually agreed.

Noble has agreed to purchase 50 per cent of product from the Tasmanian project for the first four years at an agreed fixed price Marketing Royalty Deed.

Noble will also be a paid a royalty of 2.5 per cent on all product sold for the life of the Tasmanian project but not for tonnes purchased by Noble under the Noble Offtake Agreement.

“Noble has a proven track record in helping independent miners in Australia,” Australian Bauxite CEO Ian Levy said in the company’s announcement to the Australian Securities Exchange.

“Noble provides the funding, supportive off-take and marketing alliance that we wanted to rapidly enter the bauxite market.

“ABX has the same market outlook as Noble and has the flexibility to exploit market niches and grow stronger every year.

“We look forward to a long, mutually beneficial relationship with Noble.”

Email: corporate@australianbauxite.com.au

Website: www.australianbauxite.com.au