A NEW letter of intent with one of Japan’s largest trading companies has virtually assured the future of junior Aztec Resources Ltd’s $108 million Koolan Island iron ore project, production from which is scheduled to begin late this year. Aztec now has buyers for its entire initial nine-year mine life at four million tonnes a year and the majority of funding for the project, 130 kilometres north of Derby off WA’s Kimberley coast. In the latest phase of the agreement process, Marubeni Corp has agreed to take between one and 1.5mt/year over the life of the project at a yet to be determined price and provide Aztec with up to $20 million in project development funds. Marubeni’s funding, coupled with last month’s $42.3 million fully underwritten non-renounceable issue, means the majority of the project’s capital cost has been secured. Aztec also has none of the transport uncertainties that face other iron ore newcomers, particularly those in the Mid-West region centred on Geraldton, where the state government has banned iron ore from roads within 100km of any operating railway from October this year. The Koolan Island mining operation is direct from mine to ship to the Asian steel mills.
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