Cairn Hill gets green light Colin Jacoby - MINING NEWSThursday,...

Cairn Hill gets green light

Colin Jacoby - MINING NEWS
Thursday, January 10, 2008

DIVERSIFIED explorer IMX Resources has given the go-ahead to develop its Cairn Hill magnetite-gold-copper project south of Coober Pedy in South Australia.

The Perth-based company announced that it expected to begin trial mining at the project by the end of the first quarter this year.

The news comes after IMX inked an offtake and investment partnership with Chinese steel group Tonghua Mining in December.

IMX managing director Duncan McBain said the company was committed to bringing the Cairn Hill project into production as soon as possible after entering into the heads of agreement with Tonghua Mining.

"With the offtake agreement in place, we can now proceed with confidence on the development of Cairn Hill and are aiming to be in full production early in the third quarter of 2008, with our first shipment before the end of the year," he said.

"We have been active in advancing our environmental and mining approvals, and are close to finalising all funding arrangements."

The Cairn Hill project is based on shipping unprocessed run-of-mine (ROM) ore to China for processing into a high-grade magnetite concentrate and a copper-gold concentrate.

The project is expected to produce 7.3 million tonnes of ore averaging 50.9% iron, 0.43% copper and 0.13 grams per tonne gold over a mine life of five-and-a-half years with room for expansion, the company said.

Under the HoA signed in December, Tonghua Mining will buy a 9.99% chunk, or 16.4 million shares, in IMX for $13.93 million which has been allocated to development of the project.

Tonghua Mining also agreed to purchase all of IMX's Cairn Hill's ROM production between 1.2-1.4 million tonnes per annum over three years at market prices.

Meanwhile, IMX's 53% owned TSX-Venture Exchange listed subsidiary Continental Nickel has completed a $C9 million ($A10 million) underwritten placement.

The funds raised will be used to accelerate exploration at the Nachingwea joint venture nickel project in Tanzania and to pursue new exploration acquisitions.

Continental Nickel owns a 70% stake in the project, while IMX owns the balance.

A syndicate of underwriters led by Paradigm Capital with PI Financial Corporation and Raymond James have placed 3 million shares at a price of $C3 per share.

IMX said it decided not to exercise its anti-dilution rights under the shareholder agreement with Continental Nickel. The company's holding in Continental Nickel has diluted down to 47.6% after the placement.

Shares in IMX closed down 3.5c yesterday to 64.5c and are at 64c in early afternoon trading.