core sector communique

IMX Signs Life of Mine Sales Contract Variation with Jilin Tonghua Iron & Steel

 

IMX Resources Limited (ASX:IXR) is pleased to announce that it has signed a variation to the sales contract it previously signed with Jilin Tonghua Iron & Steel Group (Mining) Co Ltd (Tonghua Mining) (ASX announcement 11 August 2008). Under the terms of the variation Tonghua Mining will now purchase all of the ore produced from Cairn Hill Phase 1 for the life of mine.

 

IMX Resources Managing Director Duncan McBain said “The signing of the sales contract variation is another significant milestone as it converts the existing 3 year contact into a life of mine contract for Cairn Hill Phase 1. All production from Phase 1 is now sold at prices related to international traded benchmark prices.”

 

Under the variation to the sales contract Termite Resources NL, IMX’s 100% owned operating subsidiary for Cairn Hill, will sell up to 1.7mtpa of unprocessed run of mine ore to Tonghua Mining for the life of mine of the Cairn Hill Phase 1 project. The original contract with Tonghua Mining was to supply up to 1.4mtpa for 3 years. The increased tonnage is available as a result of shipping through Port Adelaide rather than Darwin and optimisation of the train configurations to minimise FOB costs.

 

The variation to the sales contract also formalises the change in the load port from Darwin to Port Adelaide.

 

Apart from these changes the other terms of the sales contract remain unchanged. The ore will be sold on a FOB basis with the target shipping specification averaging 55% Fe and 0.43% Cu. Termite Resources receives payment for both the contained iron and copper, with the prices based on internationally traded benchmark prices and a 20% discount to allow for processing costs and losses.

 

The run of mine ore will be processed through the custom built processing plant at Bayuquan in Liaoning Province, NE China being constructed by Tonghua Mining.