LONDON (Alliance News) - Tri-Star Resources PLC shares rose on Friday after its joint venture moved further into the procurement phase of the Oman Antimony Roaster project by awarding further key contracts to deliver key equipment for the operation.
Tri-Star shares were trading up 11% to 0.105 pence per share on Friday afternoon.
Tri-Star holds a 40% stake in the joint venture company that holds the project, Strategic & Precious Metals Processing LLC. The company raised important funds in 2015 from selling the intellectual property rights covering its clean antimony roasting and refractory gold clean roasting processes to the joint venture company.
Tri-Star sold the rights to for a total of USD6.0 million, USD2.0 million of which will only be paid once a pilot plant at the Oman project has been commissioned.
Tri-Star's partners in Oman are the Oman Investment Fund, which also owns a 40% stake in the joint venture vehicle, and DNR Industries Ltd, which owns the remaining 20%. The Oman government effectively holds a 40% stake in the project through Oman Investment Fund.
Tri-Star has provided its share of the equity funding for the project after paying Strategic & Precious Metals Processing USD6.0 million in the year, partly funded by the proceeds generated from the sale of intellectual property rights, settling its biggest financial commitment this year.
The partners reached financial closure at the project last September, securing overall funding of USD70.0 million. That funding is comprised of USD15.0 million in equity funding, which includes Tri-Star's USD6.0 million contribution, alongside USD15.0 million of shareholder loans and USD40.0 million of committed, non-recourse project debt.
The Oman project is aiming to deliver an antimony production facility capable of delivering 20,000 tonnes of antimony production a year once up and running, and the current focus is on finalising the necessary contracts to allow construction to begin.
Recently, Tri-Star and its partners ordered the furnaces for the project and now the joint venture has signed contracts, the details of which were not published, to obtain the main antimony roasting equipment including the rotary kiln and dry and wet gas handling circuitry, representing the core operational equipment packages for the asset.
The partners had already appointed the engineering, procurement and construction management contract to WorleyParsons.
"The key milestones ahead for the project include: combining the delivery and assembly of the core roasting and gas handling process equipment; site and utility readiness; staffing build-up and training, and commissioning material feed test-work," Tri-Star said.
"The Oman Antimony Roaster project continues its emphasis on strong environmental credentials combined with an increasing focus on the provenance of supply sources. In addition, the Oman Antimony Roaster's design capability to treat gold in feed concentrates is expected to prove a significant differentiator," the company added.
The project is significant, as it looks to compete with Chinese roasters that currently dominate the market and produce antimony that will be equal to around 10% of the global market.
Full commissioning of the project is expected to occur before the end of 2017, with commercial production following in 2018.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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