While this clearly sets back first production, Argonaut believes...

While this clearly sets back first production, Argonaut believes MMI now has the opportunity to right-scale the project and explore partnership options with neighbour Gulf Alumina to maximise project value

Time to right-size the project: MMI originally planned to fast track Bauxite Hills under the less onerous EA permitting process generally applied to bulk mining projects <2Mtpa in QLD. The impediment of a full EIS has set the project back 10 months, but this affords the Company time to evaluation higher production options (4-5Mtpa) and time to negotiate a potential partnership with neighbour Gulf Alumina. Gulf’s Mining Lease (ML) bisects MMI’s project area and has comparable bauxite Resources. Importantly, the ML contains key infrastructure including a wharf on the Skardon River, an established haul road to the wharf, a camp and airstrip. A partnership could significantly reduce capex under a joint development scenario.

The project is bisected by a wedge containing Gulf Alumina’s land holding. Gulf’s mining leases contain 78.8Mt bauxite (applying a higher silica cut-off) with existing infrastructure including a camp, airstrip and haul road to an established barge docking facility. Infrastructure was established for a historic Kaolin mining operation.

Benefits of partnering with Gulf Alumina

Gulf Alumina holds a wedge shaped Mining Lease between MMI’s three Mining Lease Applications (MLs 20676, 20688 and 20689 in Figure 1). Argonaut believes with a longer lead time to development, the Company now has time to thoroughly explore and negotiate a partnership with Gulf Alumina. Under a partnership scenario, MMI could utilise existing infrastructure (barge loadout, camp, airstrip and haul roads) to reduce development capital. The combined Resource would significantly increase mine life and support higher annual production. Argonaut believes there is potential for a combined operation producing up to 10Mtpa.


------------------------

My opinion:

10 Mtpa I think is exaggerated. Would mean a new / modified EIS, Higher capex and 10 million have to first get rid of with off takes.

10 million were 44% of the current Rio Tinto output towards China (22.8 million).