IMX signs deals with Chinese firms

Subiaco-based IMX Resources NL has signed two agreements with its Chinese partners regarding the offtake from its South Australian mine and the potential acquisition of a processing plant in China.

IMX managing director Duncan McBain said the contracts formalise the arrangements put in place in the Heads of Agreement signed last December.

"The agreements mark the further evolution of the project. The milestones are steadily being ticked off, with mining and railing expected to commence in Q4 2008 ahead of the first shipment in Q1 2009," Mr McBain said.

The specific agreements with Tonghua Mining include the long term purchase and sales contract for iron & copper ore ("Sales Offtake Contract") and the asset disposal process agreement for Yingkou Australian Ore Processing Company Ltd ("Process Plant Disposal Agreement").

The Sales Offtake Contract covers the sale of the unprocessed run of mine ore from Phase 1 of the Cairn Hill magnetite-copper-gold project located 55 km south-east of Coober Pedy.

Under the Sales Offtake Contract the total planned annual ROM production for the magnetite / copper ore from Phase 1 at Cairn Hill will be sold to Tonghua Mining. Up to 1.4 million tonnes per year will be sold to Tonhgua Mining over a three year period (subject to extensions) at market related prices.

The ore will be sold on a free on board basis with the target shipping specification averaging 55 per cent iron and 0.43 per cent copper.

IMX receives payment for both the contained iron and copper, with the prices based on internationally traded benchmark prices and a 20 per cent discount to allow for processing costs and losses.

The Process Plant Disposal Agreement covers the process to be followed should the contract not be renewed by mutual agreement beyond the initial three year term. Under this agreement, IMX Resources has the first right to purchase the processing plant at Bayuquan in Liaoning Province, northeast China at an independently assessed market price.