Metallica Minerals (ASX:MLM) is expected to trade materially higher today after executing a Joint Venture agreement with a private Chinese investor for $7.5 million to develop its Urquhart Point bauxite and mineral sand deposits in Queensland.
Funding will also be allocated towards exploration for other Heavy Mineral Sands and Bauxite deposits on its tenements on the western side of Queensland’s Cape York Peninsula.
Capital from the JV will fully finance construction of Metallica’s proposed Urquhart Point Mineral Sands mine, based on the $6.5 million CAPEX and working capital requirements outlined in the Project Feasibility Study released in June.
The mine will be the first HMS-operation for Metallica to achieve production.
A $500,000 deposit payable under the agreement and is to be received by Metallica within 5 business days.
Funds to be provided under the Agreement will also finance up to $500,000 for the exploration for additional HMS and bauxite deposits within prospective regional exploration tenements covering 2,500 square kilometres.
A further $4.5 million will be paid after the other conditions precedent to the Agreement are satisfied.
The final tranche of $2.5 million will be paid to the Joint Venture when the Cape York HMS and Bauxite Joint Venture Manager requests it.
The Conditions Precedent to the Agreement include FIRB approval, payment of the $500,000 deposit within 5 business days; and payment of the further $4.5 million once FIRB approval is received.
Metallica and the private Chinese investor will each ultimately hold a 50% interest in a newly established Cape York HMS and Bauxite Joint Venture owning the Urquhart Point Project Mining Lease and all the Cape York regional exploration permit.
Metallica is capitalised at around $13 million.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.