Marengo Mining has signed a Memorandum of Understanding (MOU) with a Chinese construction and engineering group which is expected to pave the way for formal agreements on financing, construction and off-take for its Yandera Copper-Molybdenum-Gold Project.
The agreement with China Nonferrous Metal Industry's Foreign Engineering and Construction Co (NFC), which was signed in Beijing by senior representatives of NFC and Marengo's managing director and CEO Les Emery, represents an important step towards development of Yandera.
Marengo is in the final stages of a definitive feasibility study (DFS) on the project, which is due to be finalized by the end of 2010.
This will provide the foundation for financing and development of a large-scale, long-life operation to begin at Yandera, with annual ore production anticipated to start at about 25 million tonnes and ramp-up subsequently to 50 million tonnes, making it one of the significant new copper-molybdenum projects in the world. Yandera concentrate is expected to enter world markets from the 2013/14 financial year.
Under the MOU, Marengo has agreed to work exclusively with NFC and Arccon to establish the cost and program for delivery of the Yandera project in parallel with the completion of the current DFS.
NFC has a co-operation agreement with Arccon, under which Arccon is a joint venturer with NFC in providing a range of engineering construction and delivery services relating to mineral resource development projects that Arccon introduce to NFC. Arccon is owned by the former principals of Minproc Engineers of Australia.
The Yandera discussions will be conducted with a view to entering into a formal construction agreement under which Marengo will appoint NFC as principal contractor under a Lump Sum Turnkey Contract, following a detailed evaluation of the project construction costs, to be undertaken by NFC as part of the final stage of the DFS.
They will also involve a formal financing agreement, subject to agreement on the terms of the construction contract, under which NFC will facilitate at least 70% of the necessary financing for the project development costs of the Yandera Project through Chinese banks.
In addition, the MOU contemplates NFC placing a substantial amount of the project copper and molybdenum concentrate offtake with a variety of customers, including NFC itself.
The MOU includes an indicative timetable which contemplates the commencement of project construction at Yandera by the first half of 2012.
www.marengomining.com

< Prev		Next >