Bauxite Resources has finalised its joint venture with China-based Yankuang Corporation, which will now proceed with planning to construct an alumina refinery in the South West.
Bauxite Resources has finalised its joint venture with China-based Yankuang Corporation, which will now proceed with planning to construct an alumina refinery in the South West.
The company announced today it had signed an agreement with Yankuang to confirm that all of the conditions of its Bauxite Resource joint venture and Alumina refinery joint venture had been satisfied.
The joint venture will officially commence on April 1, Bauxite said.
The mining and refining joint venture with Yankuang is aimed at delivering a 1.1 million tonnes per annum alumina refinery in the South West by late 2015.
Bauxite said funding for all activities would be in accordance with the joint venture agreements signed in January.
Under the agreement, Yankuang will pay 91 per cent of the refinery construction costs and receive 70 per cent of the plant's output.
Bauxite Resources will fund the remainder of the costs and receive 30 per cent of the plant's alumina output.
Also, Yankuang will provide 90 per cent of the funds required for the project's bankable feasibility studies, and 70 per cent of exploration costs, with Bauxite providing the balance.
Bauxite chief executive Scott Donaldson will become the joint ventures' management company's chief executive.
Bauxite's full announcement is pasted below:
BRL AND YANKUANG EXPLORATION AND REFINERY JOINT VENTURE: CONDITIONS PRECEDENT FOR AGREEMENTS HAVE BEEN SATISFIED
Bauxite Resources Ltd (ASX:BAU) ("BRL" or "the Company") has signed an agreement with Yankuang Corporation ("Yankuang") to confirm that all the conditions precedent in the Bauxite Resource Joint Venture and Alumina Refinery Joint Venture have been satisfied. The two joint ventures will have an official Commencement Date of 1 April 2011. The Conditions Precedent had included relevant Chinese and Australian regulatory approvals.
Mr Scott Donaldson, the Chief Executive Officer ("CEO") of Bauxite Resources Ltd has been confirmed the CEO of the Management Company that operates the two joint ventures.
The Commencement of the two joint ventures will enable the following:
1. Funding for all activities from 1 April 2011 will be in accordance with the Joint Venture Agreements with expenditure split 90/10 on Bankable Feasibility Studies and 70/30 on Exploration activities (Yankuang/BRL respectively).
2. Continuation of the scoping and site selection studies. The scoping studies have been ratified by the Joint Venture Board and form an integral part of the Bankable Feasibility Studies.
3. BRL will be refunded a "Reimbursement Amount" being 70% of past expenditure. This amount is approximately AUD$6.8 million.
4. BRL will also be entitled to payment of an Interim Amount for part of the expenditures since the Heads of Agreement and detailed agreements were signed.
5. Continuation of an exploration program, subject to normal statutory approval processes, to define the resources to underpin the proposed alumina refinery.
Further regulatory approvals will be required closer to the times of construction and production.