Perth-based exploration company Metalicity has signed a memorandum of understanding (MOU) with China Minmetals Nonferrous Metals (CMN) for zinc and lead offtake at the Admiral Bay zinc project in Western Australia.
CMN, a subsidiary of China’s largest metals and minerals group China Minmentals, has an annual zinc smelter capacity of 1Mtpa.
Under the MOU, the companies will collaborate to establish a long-term offtake partnership. Metalicity will supply an initial 10 per cent of future offtake from an expected production of 174Kt zinc and 115Kt lead per annum from Admiral Bay for 10 years after the project comes into production.
In exchange, CMN will provide metallurgical and beneficiation testwork – paving the way for the company’s future investment in Metalicity or Admiral Bay.
Metalicity managing director Matt Gauci said he looked forward to progressing binding agreements in the near future.
“Admiral Bay continues to attract some of the world’s major zinc industry participants,” he said.
“Metalicity is pleased to have entered into this MOU with China’s leading zinc smelting companies and one of the largest metals and minerals companies in the world, China Minmetals, which we view as a strong endorsement of the potential for Admiral Bay.”
This comes after Metalicity entered an MOU with China Nonferrous Metals earlier this year for development, financing and construction of Admiral Bay.
“In conjunction with our MOU with China Nonferrous Metals for the development and construction of Admiral Bay, the company is now well positioned to progress long term financing solutions for the project in partnership with some of the world’s largest and experienced zinc industry participants,” Gauci added.
Minmetals is currently completing a merger with China Metallurgical Corporation (MCC), with their combined revenues reported to amount to nearly double that of BHP.