Matsa Resources (ASX: MAT) is.....10 Jul 2011 15:13
Matsa Resources (ASX: MAT) is making solid progress towards developing its 1.47 million ounce Norseman Gold Project with a third Chinese investor to commence due diligence through a site visit shortly.
The company has received a letter of intent to enter into a binding agreement from Shanghai Zendai Investment Development Co. Ltd (Shanghai Zendai), widening the field of potential Chinese investors.
The Norseman Gold project is located just south of the Dundas Iron Ore Project in Western Australia, where previous feasibility study work on this low grade gold mineralisation indicated cash operating costs of around AUD$900 per ounce could be achieved.
The current Mineral Resource for the Norseman Gold Project totals 26.5 million tonnes at 1.7 grams per tonne (g/t) for 1.47 million ounces.
Earlier this week Matsa signed a non-binding terms sheet with Shandong Gold Mineral Resources Group Co. Ltd (Shandong Gold) and has also received a separate letter of intent to enter into a binding agreement with China Nerin Engineering Co. Limited (China Nerin).
Matsa said it is bullish that talks with either Shanghai Zendai, Shandong Gold or China Nerin will lead to a binding agreement to develop the project on highly favourable terms. The company is continuing discussions with other potential investors.
Key features of the Shanghai Zendai Letter of Intent include:
- Acquire a significant interest in the Norseman Gold Project held by ASPMI Pty Ltd (a wholly-owned Matsa subsidiary);
- Securing a finance facility of approximately $103m, being the preliminary estimate to establish the plant and mine; Participating pro rata in the Definitive Feasibility Study;
- Establishing a Joint Venture entity with Matsa to look for further resource opportunities throughout Australia;
- Securing off take agreements for magnetite by-product produced by the Norseman Gold Project.
Previous feasibility study work on the low grade gold mineralisation at Norseman indicated cash operating costs of A$900 to A$950 per ounce, however, this could be improved once by-product credits from production of magnetite concentrate are taken into account lowering cash costs to $790 per ounce.
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