The decline in the iron ore price has been blamed for a decision by the board of directors of Termite Resources to put the company into administration.
Iron ore has fallen 34 per cent this year, down to $US89.30 per tonne, the first time it has traded lower than $US90 since 2012.
IMX announced this morning that all contractual liabilities would be the obligation of Termite Resources, except for a $3 million capped guarantee provided by IMX under the port handling services contract with Flinders Ports.
Termite Resources is the entity which owns the Cairn Hill mine in South Australia, which is 51 per cent owned by IMX Resources in a joint venture with Taifeng Yuan Chuang International Development Company.
IMX managing director Gary Sutherland said IMX has discussed the matter with Flinders Ports and said it will reach a solution if there is a claim under that guarantee.
“This decision has no impact on the exploration programs currently underway at IMX’s Ntaka Hill Nickel Sulphide Project, or its Kishugu gold prospect ,” he said.
“In addition, effots to secure a partner for the Mt Woods magnetite project are continuing.
Sutherland said the administrator of Termite Resources is Martin Lewis of Ferrier Hodgson, who is expected to provide an initial assessment of Cairn Hill’s financial position as soon as possible.
The Cairn Hill mine is located 55 kilometres south-east of Coober Pedy, and commenced production in December 2010.
Based on the projected mine life, Cairn Hill was only expected to produce until early 2015, however IMX was exploring the possibility of a Phase 2 development project which could have extended operations for another 12 to 15 months.
According to IMX, the Phase 2 area contains an indicated mineral resources of 3.77 million tonnes at 48.7 per cent Fe for 1.8 million tonnes of contained metal, as well as an inferred resource of 4.6 million tonnes at 45.8 per cent for 1.8 million tonnes.
IMX won the Business SA 2013 Mining and Energy Export Award for export solutions developed with Flinders Ports, which led to IMX becoming the first new iron ore exporter in South Australia in 100 years.