Korab signs Winchester magnesite heads

2015-11-05

Nov. 05, 2015 - KORAB Resources Ltd has entered into heads of agreement for an offtake of 1.5 million tonnes of magnesium carbonate rock (magnesite) from the Winchester magnesite deposit in the Northern Territory.

 

The offtake agreement, with an unnamed and unrelated company, covers sales of 300KT/year of magnesite rock for five years and can be extended for further periods.

 

The agreement also covers acquisition of an equity interest in subsidiary AusMag for $6 million, provision of assistance with funding of the capex and opex of the project, assistance with the development of the quarry, assistance with its operations, and assistance with marketing of the output.

AusMag has committed to the offtake agreement, but is under no obligation to sell equity stake in AusMag, or to accept the assistance in any of the above areas should alternatives offered by other parties prove superior.

Korab is in discussions with further parties interested in acquiring stake in AusMag and other potential funders and magnesite buyers.