Financing for Metalicity’s Admiral Bay zinc project in Western Australia’s Kimberley region has moved a step closer today with China Non-Ferrous Metals signing off on a review of the Pre-Feasibility Study into Stage 1 of the project.
The review of PFS technical and financial parameters is a key term of the Memorandum of Understanding (MoU) signed between the two parties in February last year for the feasibility, development and financing of Admiral Bay.
“The positive review supporting the MOU with China NFC and combined with successful metallurgical testwork supporting the MOU with China Minmetals established a very strong framework for the feasibility, development, financing and offtake agreement with China’s largest and most credible engineering, resources, mining and metals groups in the zinc sector,” Metalicity Managing Director Matt Gauci said.
China NFC will now complete a Project Study Report incorporating Engineering Procurement Construction (EPC) costings as part of the Admiral Bay PFS.
The Project Study is anticipated to significantly reduce overall capital and operating costs, reduce long lead item times, accelerate development timelines and overall economics, and support a binding agreement regarding the feasibility, development and financing of Admiral Bay.
Today’s news comes after Metalicity satisfied another key term of the MoU last month with preliminary metallurgical testwork confirming production of high quality international saleable concentrates.
Terms of the MoU also include securing Chinese project financing, outlining product specifications and off-take arrangements with Chinese smelters.
Satisfying MoU terms will form the basis for progressing binding and formal funding, joint venture or other financial agreement with China Non-Ferrous Metals for Admiral Bay.
The PFS for Stage 1, released in October last year, confirmed Admiral Bay had potential to be a long life, low cost zinc-lead-silver operation.
Admiral Bay PFS Stage 2 will be undertaken with a JV partner with advanced talks underway with a number of parties.
Located in the Canning Basin, Admiral Bay is a Mississippi Valley Type deposit. JORC 2015 Inferred Mineral Resource stands at 170 million tonnes at 7.5% ZnEq (4.1% Zn, 2.7% Pb, 25 g/t Ag) at a cut-off grade of 3% Zn+Pb, including a higher-grade zone of 20 Mt at 10% ZnEq at 7.7% ZnEq cut-off.
Shares in Metalicity (ASX: MCT) were trading 0.1c higher at 4.3c in late morning trade AEDT.
