Minemakers signs MoU for Wonarah

THE BOURSE WHISPERER: ASX, TSX and NXS-listed Australian phosphate play Minemakers Limited has signed a non-binding Memorandum of Understanding with Bombay Stock Exchange-listed NMDC Limited to establish a pathway for the development of its 100% owned Wonarah phosphate deposit in the Northern Territory.

Under the MOU relevant NMDC management staff will join the Minemakers team to undertake a joint Feasibility Study into the agreed aspects of the full development of Wonarah, Australia’s largest known, undeveloped, phosphate deposit.

The Wonarah project boasts JORC & NI43-101 Compliant Inferred Resources at 1,258 million tonnes at 12% phosphate and is the only Australian rock phosphate project granted Government Major Project Status.

The proposed development for Wonarah includes: A mine and downstream processing facilities to produce beneficiated rock phosphate for export; phosphoric acid (an intermediate product); and, finished fertiliser products such as DAP and MAP (diammonium phosphate and monoammonium phosphate).

The purpose of the Feasibility Study is to have the project sufficiently advanced by early fourth quarter 2011 to a stage where the results will support Minemakers and NMDC signing a full Joint Venture agreement governing the completion of bankable feasibility, financing and development of Wonarah and the downstream fertiliser manufacturing facilities.

The terms of the JV will be negotiated during the advancement of the Feasibility Study that is due to begin soon.

The general terms of the JVA are anticipated to include:

– NMDC to acquire 50% equity in the Wonarah project.
– NMDC will have responsibility for arranging project finance for the full development of Wonarah via debt finance.
– Repayment by NMDC to Minemakers of certain project and other costs already incurred on the Wonarah project to date.

“Minemakers is very pleased with this potential financial pathway to developing Wonarah,” Minemakers managing director Andrew Drummond said in a company announcement.

“Wonarah is Australia’s largest known phosphate deposit and a partner of the scale of NMDC brings the financial and marketing capacity to allow the project to be developed to its full potential.

“We look forward to working with Mr Rana Som and the NMDC Group to advance the Wonarah phosphate project.”

NMDC is no stranger to the resources world having been incorporated in 1958 as a Government of India fully owned public enterprise.

It is India’s single largest iron ore producer and exporter however, since its inception, has also been involved in the exploration for, or exploitation of, a wide range of minerals including copper, rock phosphate, diamonds, limestone, tin and tungsten.

NMDC has current turnover in the order of $US1.5 billion, and is listed amongst the Bombay Stock Exchange National 100 Index.