THE BOURSE WHISPERER: Metro Mining (ASX: MMI) has signed a bauxite off-take non-binding Memorandum of Understanding (MoU) with the Xinfa Group of China.
Metro described Xinfa Group to be one of the largest integrated aluminium companies in China.
Apart from owning refining and smelting operations in Shandong, Guangxi and Xinjiang Provinces, Xinfa is currently a 7.2 per cent shareholder in Metro.
Metro has forecast total annual production of up to two million tonnes from its Bauxite Hills project.
The company outlined the agreement covers a minimum contract tonnage of one million tonnes a year up to a maximum of 1.2 million tonnes a year over the initial five years term – representing around half of its annual production.
“This MoU shows the strong relationship and exceptional good faith between Xinfa and Metro Mining,” Metro Mining CEO Simon Finnis said in the company’s announcement to the Australian Securities Exchange.
“I am, and all MMI shareholders should be, heartened by the goodwill and support shown by Xinfa.
“We look forward to continuing to work closely together as we finalise a long term contract to the benefit of all concerned.”
Metro Mining said the MoU followed a string of recent positive events for the company, which include positive results from a Pre-Feasibility Study, an increase in the Bauxite Hills Ore Reserve from 12.1 million tonnes to 48.2 million tonnes, and a $5.6 million Capital Raising comprising a fully underwritten shareholder Rights Issue aimed at raising $3.6 million, which followed a $2 million Placement.
“Focus will now be on completion of the Definitive Feasibility Study (DFS), achieving permitting approvals, undertaking pre-development work including potential pre-commitments for mining and transhipment contractors, and finalising the formal and binding offtake Agreement,” Finnis said.