Northern Minerals (ASX: NTU) has selected Sinosteel MECC, part of the Sinosteel Group, as its preferred EPC contractor for the Browns Range Pilot Plant development. An MoU with Sinosteel sets out the Company’s plans to have Sinosteel MECC has lead contractor for the A$60m development, which is expected to commence in early 2017. As part of the MoU, Sinosteel MECC has agreed to defer 20% of payments for 2 years, with the rights to convert into NTU equity at its election.
- Sinosteel Equipment & Engineering Co., Ltd. (Sinosteel MECC) selected as Engineering, Procurement and Construction (EPC) contractor for Browns Range Pilot Plant.
- Non-binding Memorandum of Understanding (MoU) between Northern Minerals and Sinosteel MECC signed in Beijing.
- As part of the MoU, Sinosteel MECC has agreed to defer 20% of payments for 24 months, with a right to convert into Northern Minerals Ordinary shares.
Australian heavy rare earths developer, Northern Minerals Limited (ASX: NTU) is pleased to announce that it has executed a Memorandum of Understanding (MoU) with Sinosteel Equipment & Engineering Co., Ltd. (Sinosteel MECC), a subsidiary of Shenzen listed Sinosteel Engineering & Technology Co., Ltd. (Sinosteel ENTEC), for the delivery of the Browns Range Pilot Plant in northern Western Australia. Sinosteel MECC has been selected as the EPC contractor for Australia’s first dysprosium project, which is planned to be constructed in 2017.
Under the non-binding MoU, Sinosteel MECC will be responsible for the engineering, procurement and construction of the 60,000tpa Browns Range Pilot Plant. It is expected that the Pilot Plant modules will be fully constructed in the People’s Republic of China (China) and then transported and installed on site in Australia. Sinosteel MECC will be the lead contractor on site with other Australian groups sub-contracting as required.
The contract size for the Browns Range Pilot Plant is estimated at ~A$60 million, including the following:
- Pilot plant process facilities (beneficiation and hydrometallurgical process plants) – A$28m;
- Mining and associated infrastructure (including tailings storage facility, camp, water supply, airstrip) – A$22m; and
- Commissioning/Working Capital requirements – $10m.
Under the MoU, Sinosteel MECC has agreed to defer payments totaling A$12 million for a period of 24 months. Alternatively, Sinosteel MECC has the right, at its election, within nine months of practical completion, to convert the deferred payment amount into Ordinary Northern Minerals’ shares at a conversion price of the lower of 15 cents per share or the 20 day VWAP prior to election.
The conversion of the MoU into an EPC contract with funding is subject to finance and a final investment decision by the Northern Minerals’ and Sinosteel’s Board, expected in mid-Q1 2017.
Northern Minerals’ Managing Director George Bauk welcomed a team with the calibre of Sinosteel MECC to the Browns Range Project, acknowledging it as a strong endorsement of the Company’s vision.
“We are excited to be partnering with a strong party such as Sinosteel MECC. The final pieces in the puzzle are coming together as we move towards a final investment decision,” Mr Bauk said.
For further information:
George Bauk
Managing Director/CEO
Northern Minerals
+61 8 9481 2344
For media and broker enquiries
Andrew Rowell / Michael Cairnduff
Cannings Purple
+61 8 6314 6300
