Ann: Railway Funding Agreement Signed on Completi, page-8

re: Ann: Railway Funding Agreement Signed on ... Great article in Mining News!

Great work from EQX managment.

Railway DFS deal for Equatorial
--------------------------------------------------------------------------------
Thursday, 6 October 2011

AFTER completing a rail engineering study on the line that links the Mayoko-Moussondji iron project to the deepwater port of Pointe-Noire, Equatorial Resources will now work with Congolese railway company Chemin de Fer Congo Ocean to complete a rail definitive feasibility study.

Equatorial managing director and chief executive officer John Welborn said the DFS would be funded by Equatorial, with CFCO providing information and any non-financial resources to carry out the study.

The DFS would accurately identify works and costs required to upgrade the railway line, Equatorial said.

In addition, it would identify the terms of a tariff agreement between both parties, which was to be completed before any pre-financing occurs.

Equatorial will pre-finance the required upgrades to the railway line as defined in the DFS.

Any work approved by CFCO and financed by Equatorial will be treated as a prepayment against any future rail transport charges.

Equatorial says it has been in contact with a number of consultants about the railway DFS, which is scheduled to start before the end of 2011.

In September last year, Equatorial signed a MoU with the CFCO, which granted it immediate access to the railway line.

The MoU also committed both parties to work together to complete the engineering study on the railway, which was conducted between January and March this year.

R&H Railway Consultants was commissioned by Equatorial to conduct a review of the study and to design an operations blueprint outlining key parameters for commercial bulk commodity transport from Mayoko to Pointe-Noire.

The completed engineering study revealed that the railway is capable of transporting 10 million tonnes per annum.

Equatorial said the tonnage was based on the completion of an accelerated maintenance program, the upgrading of communications infrastructure and the reopening of existing passing loops and stations along the line.

“The completion of the railway engineering study and resulting signing of a further agreement with the CFCO is a key development milestone for the Mayoko-Moussondji iron project,” Welborn said.

“The prepayment arrangement we have negotiated will allow us to commence the work we have identified as being required and has the potential to benefit Equatorial considerably upon the commencement of production.

The Mayoko-Moussondji iron project is located in the southwest region of the Democratic Republic of the Congo and has an estimated exploration target of between 2.3 and 3.9 billion tonnes of mineralisation at a grade of 30-65% iron.

CFCO controls the country’s railway system and is administered by the Ministry of Transport.

Equatorial Resources shares were unchanged in morning trade at $A2.48.