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Magnis Resources (ASX:MNS) has signed a binding agreement with off-take partner China National Nonmetallic Minerals
Industrial Limited Corporation (SINOMA) to provide US$150 million funding to cover engineering, procurement, construction and finance (EPC+F) for the Nachu Graphite Project in Tanzania.
As quoted in the press release:
The binding term sheet is structured on the Pre-Feasibility Study findings and has a debt to equity ratio of 90:10 at commercially competitive rates. This translates to SINOMA’s portion of finance being US$150M and the Magnis share being US$15M for a total of US$165M (A$215M). The framework is structured on the basis of production of 200,000 tonnes per annum of graphite concentrate. SINOMA will provide engineering goods and services including – mechanical, civil, electrical, instrumentation, piping specifications, construction drawings, construction and project management.
Funding is contingent on receiving necessary government approvals. In recent months Magnis has engaged with government officials, the local community and other stakeholders to ensure the project continues to track towards production in the second half of 2016. All work on the Environmental Impact Assessment (EIA) and the consultation with the local communities and district government is progressing without any significant issues.
A project team consisting of SINOMA and Magnis representatives will be set up in coming weeks with senior Magnis management travelling next week to SINOMA’s headquarters in Beijing to start this process. Magnis’s engineering consultants will be assisting in the process and the development of the detailed design of the plant which has started. Sales of the future production have been accounted for via the two binding offtakes that total 180,000tpa. These offtakes with SINOMA and Sinosteel Liaoning are the largest in the graphite sector.
Magnis Chairman, Frank Poullas, said:
Today is another historic day for Magnis Resources. Securing a binding term sheet for financing the Nachu Graphite Project for an amount of US$150 million truly puts Magnis in a strong position. To have a relationship with such a strong partner in SINOMA, one of the largest and most recognised integrated graphite companies in the world, is significant. SINOMA has institutes with world leading expertise in graphite process engineering and plant design. With the financial and technical muscle of SINOMA along with our management team’s proven track record of bringing projects into production in Africa, the future looks very promising.
Click here to read the Magnis Resources (ASX:MNS) press release
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