Diatreme Resources (ASX: DRX) has signed a heads of agreement with Perpetual Mining Holding for a $2 million investment into its Cyclone Zircon heavy mineral sands project, Western Australia.
The project is controlled by Diatreme's 100% subsidiary, Lost Sand.
Perpetual is a Hong Kong company with business connections in China, including operational experience in the iron ore mining and steel products processing industries.
Subject to Foreign Investment Review Board approval, Perpetual has confirmed their commitment to invest $2 million directly into the project to earn a 6% equity stake.
The investment is designed to fund the securing of suitable water supplies for future mining operations, approvals for infrastructure development, and approvals required for the grant of certain mineral licenses.
Diatreme recently satisfied the initial milestone milestone with the discovery of significant water flows below 530 metres from a water bore drilled into Officer Basin sediments beneath the proposed Cyclone mine area in November.
Pump testing, expected to be undertaken and reported on in early 2014, will provide Diatreme with a clearer picture of planning requirements for any future production bore field to supply a future mining operation.
Work will continue on achieving the second and third milestones with Perpetual funding the activities through instalment payments determined as per agreed budgets and work plans.
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