Ann: Mt Woods Scoping Study Demonstrates Developm, page-6

re: Ann: Mt Woods Scoping Study Demonstrates ... South Australian mining and energy projects hit key milestones in good news for the state

Cameron England

June 04, 2013 11:27AM

SOUTH Australia's resources sector got a boost today with three major projects hitting key milestones.

Perhaps most significantly, Rex Minerals announced it has signed a non-binding agreement to fund 70 per cent of the cost to build its Hillside copper and gold mine near Ardrossan on the Yorke Peninsula.

The company has struck an agreement with Chinese company NFC to fund an expected $550 million of the cost of building the mine, and also manage its construction.

The construction of the mine would be subcontracted out to NFC's Australian partner Arccon.

Rex is now working on finding the balance of the funding, and hopes to start building the mine in the first six months of next year.

IMX Resources also announced good news, releasing a study showing its Mt Woods iron ore mine near Coober Pedy would be economically viable.

The company also has a mine 15km from the proposed new mine, and said the savings on infrastructure from having the projects near to each other was key.

The company's study shows it would cost $295 million to build the mine, which would pay itself back in four years.

The study was based on a mine exporting 2.5 million tonnes of iron ore per year through Port Adelaide, for more than 25 years.

The size of the iron ore deposit would also support a larger scale project, the company's managing director Neil Meadows said.

"We believe the Mt Woods project is a unique opportunity in the Australian magnetite industry as the infrastructure required to develop the project is already in place and being used by IMX's Cairn Hill mine," he said.

"As a consequence, unlike most pre-development and current Australian magnetite projects, Mt Woods does not require large-scale capital investment and is not reliant on third parties for new infrastructure, in order to develop a potentially economically viable project."

In the energy sector Chinese energy giant China National Offshore Oil Corporation has committed "significant funding" to accelerate work on a multi-billion dollar joint venture project with Altona Energy in the state's north first announced in 2009.

The financial commitment and accelerated work program has helped secure a State Government extension on its exploration licences until June 2015. The licences were due to expire in two days.

Drilling on site is expected to start at the end of this year a delay from the previously stated timeline of early 2012.

Altona managing director Chris Schrape did not reveal the funding commitment but said the process of securing a drilling contractor would start later this month and more details of the work program revealed subsequently.

The state government is already privy to all the details but the information has not been made public yet.

http://www.adelaidenow.com.au/business/south-australian-mining-and-energy-projects-hit-key-milestones-in-good-news-for-the-state/story-e6frede3-1226656890202