THE BOURSE WHISPERER: Metallica Minerals (ASX: MLM) has entred a loan agreement with South West Pacific Bauxite (HK) Ltd (SWPB), 75 per cent owner of the advanced Wagina bauxite project in the Solomon Islands.
Metallica Minerals is lending SWPB $120,000, in exchange for which Metallica has been granted an option to carry out exclusive due diligence on Wagina with a view to ultimately completing a transaction involving the project.
Metallica is also progressing its Urquhart bauxite project on Queensland’s Cape York Peninsula towards production.
The company explained it has been canvassing growth options to enable it to increase its production profile towards the previously stated target of five to seven million tonnes per annum of bauxite, over three to five years.
Metallica said its initial assessment of Wagina suggests the project meets its criteria as an advanced long-life, low-cost asset that has the potential to deliver long term value for shareholders.
“After an extensive and disciplined search in Australia and overseas, we are excited to have identified the Wagina bauxite project as an asset that is potentially the right fit for the company,” Metallica Metals managing director Simon Slesarewich said in the company’s announcement to the Australian Securities Exchange.
“This project has the ability to significantly extend our current Reserve life and lift the production profile beyond what Urquhart will deliver when it comes online.
“Similar to Urquhart, Wagina has the potential to be developed at a relatively low capital cost and in a manner that could deliver outstanding returns.
“We have been selective with growth opportunities and we intend to be thorough in our due diligence on Wagina as the Solomon Islands is a new jurisdiction for the company.
“We look forward to commencing this process and expect to announce the results later this year.”