IMX finds new customer for second Cairn Hill ore shipment

Iron ore prcomo calcular enchimento de moinho de bolaoducer, IMX Resources Limited has reported that Sichuan Taifeng will be the purchaser of the second shipment of Cairn Hill ore after Juhua Group Corporation failed to provide a letter of credit for the shipment as required by the terms of the legally binding term sheet signedin January.

Under the legally binding term sheet between Hong Kong based Juhua Group Limited, Taifeng Yuanchuan International Development Co. Ltd and Termite Resources N.L., Juhua was due to purchase the shipment currently being loaded with Cairn Hill Phase 1 ore.IMXsaid in a statement thatJuhua failed to provide a letter of credit for the shipment as stipulated in the term sheet and sought to vary the agreed terms prior to its first shipment. Further discussions will be held with Juhua after the Chinese New Year to determine their performance for the balance of the shipments over four years.

Sichuan Taifeng has agreed to accept the current shipment under its life of mine offtake contract. As such there will not be any revenue or cost impact on IMX, or its operating subsidiary Termite Resources. The flexibility shown by Sichuan Taifeng in firstly agreeing to place ore with a second customer, then agreeing at very short notice to accept the shipment is very positive for the Cairn Hill project going forward.

Termite Resources and Sichuan Taifeng are currently seeking legal advice concerning this failure by Juhua. Subject to the outcome of further discussions with Juhua after the Chinese New Year, Termite Resources and Sichuan Taifeng will consider all options, including legal avenues, available to them.

Duncan McBain, Managing Director of IMX said, “While we are obviously disappointed with what has happened, the performance of Sichuan Taifeng has been very positive for Cairn Hill.”

”IMX and Sichuan Taifeng will try to resolve the situation with Juhua or alternatively seek to firm up arrangements with other potential customers. IMX may take this as an opportunity to amend the performance terms on secondary offtake agreements to allow for greater flexibility in procuring competitive alternative contractual buyers.”