MinRes and Reed amend Mount Marion ownership structure

Australian diversified resmaquina trituradora de pet sencilla imagenources company Reed Resourceshas announced the signing of a binding Memorandum of Understanding with Mineral Resources Limited (MRL) to amend the contractual arrangements regarding the Mt Marion Lithium Project.

According to a Reed Resources statement, "Reed Resources and Mineral Resources have amended the ownership structure of the Mt Marion Lithium Project to achieve greater alignment of interests for the down stream processing of Spodumene to battery grade Lithium Carbonate."

Mineral Resources will convert a right to 40% of Mt Marion Project profits to 30% equity interest in Reed Industrial Minerals which holds 100% of the Mt Marion Project. The Mt Marion Project will have an initial capacity of 200,000tpa of chemical grade spodumene concentrate, 60,000tpa of mica and 30tpa tantalum concentrate. Reed Resources also reported that exploration targeting additional resources of 10-15Mt of 1.1-1.4% Li2O has commenced.

Current arrangements commit Mineral Resources to build, own and operate processing facilities, fund all development costs and operate the project, to earn 40% of the profits from the operation. Under the revised agreement Mineral Resources will continue to fund and operate the project with the profit right converted into an equity interest equivalent to 30% of the issued and allotted share capital in Reed Industrial Minerals. MRL will use reasonable endeavours to complete construction by 30 September 2011 and the commissioning of the plant on or before 15 December 2011.

Reed Managing Director Chris Reed said: “This binding MoU directly aligns the interests of Reed and MRL and provides a clear path to production for the world’s 2nd largest source of spodumene concentrate. We expect, with by-products the Mt Marion Lithium Project to be globally cost competitive and operate at the lower end of the cost curve. As joint equity owners of the underlying resources both parties are now incentivised to expand resources and evaluate increasing production rates.”

Following the recent final mining approval from the Department of Mines and Petroleum, the Mt Marion Partners (Reed Resources and Mineral Resources) have agreed to construct a plant with an initial capacity to recover 200,000 tonnes per annum of chemical grade spodumene concentrate, containing some 12,000 tonnes lithium oxide (Li2O). Total contained lithium oxide resources at present are 146,000 tonnes (Li2O). The plant will also recover some 60,000 tpa of mica and 30tpa of tantalum concentrate as accessory products.