IMX inks new sales contract and revises work plan

THE BOURSE WHISPERER: IMX Resources has struck a Life Of Mine sales contract with Vingo Resources for 50 per cent of all ore produced from the Cairn Hill mining operation located 55 kilometres south-east of Coober Pedy in South Australia, close to the Darwin – Adelaide railway.

The Cairn Hill mining operation operates under a Joint Venture between IMX Resources (51 per cent) and Taifeng Yuangchuang International Development Co. Ltd. (49 per cent).

Cairn Hill produces 1.7 million tonnes per annum of magnetite-copper direct shipping ore (DSO).

The sales contract between IMX and Vingo is based on industry standard iron ore and copper pricing benchmarks and has commercial terms comparable to the Taifeng LOM contract.

IMX also confirmed it is in advanced negotiations with a number of other end-user customers to finalise LOM sales contracts for the remaining Cairn Hill DSO product, at similar terms.

IMX said the Joint Venture partners have agreed on a revised Work Plan for the Cairn Hill mining operations.

This new Work Plan was implemented at the end of March resulting in the mining contractor demobilising surplus labour and equipment.

The new Plan is targeting cash operating costs of $80 per tonne Free On Board (FOB), which IMX said it expected would be achieved in the current quarter.

 “The Life of Mine sales contract with Vingo will remove much of the uncertainty associated with the Taifeng LOM Contract which has weighed heavily on market sentiment toward IMX over the past six months,” IMX managing director Neil Meadows said in the company’s announcement to the Australian Securities Exchange.

“We have achieved pricing similar to the Taifeng LOM Contract and with the implementation of the revised work plan we expect Cairn Hill to generate EBIT of $40 to 45 Million per year going forward.
“IMX’s share of this will underpin our ambitious growth strategy aimed at delivering value to our shareholders.”