As part of an existing memorandum of understanding, China Non-Ferrous Metals has completed a review of Metalicity’s (ASX: MCT) pre-feasibility study for its Admiral Bay zinc project in Western Australia’s Kimberley region.
The completed review opens the door for the next milestone under the MoU.
The MoU was announced in February last year and paves the way for China Non-Ferrous Metals to ink a binding agreement and become potential partner in developing and financing Admiral Bay through to production.
As part of the MoU, China Non-Ferrous Metals was conduct a detailed technical and financial review of pre-feasibility study stage one report on Admiral Bays.
Once the review was completed, the duo will prepare a project study report that complies with Chinese bank financing requirements.
China Non-Ferrous Metals will also incorporate its engineering, procurement and construction costings into the pre-feasibility study.
Once the milestones have been achieved, the parties would work together in securing financing for further feasibility studies and development of Admiral Bay through to commissioning.
Metalicity is anticipating the MoU will be made a binding agreement when the project study has been completed.
“The positive review supporting the MoU with China Non-Ferrous Metals and combined with successful metallurgical test work supporting the MoU with China Minmetals established very strong framework for the feasibility, development, financing and offtake agreement with China’s most credible engineering, resources, mining and metals groups in the zinc sector,” Metalicity managing director Matt Gauci said.
In addition to its MoU with China Non-Ferrous Metals, Metalicity inked a MoU with China Minmetals in July last year regarding future zinc and lead offtake from Admiral Bay.
Under the MoU with China Minmetals, Metalicity will supply 10% of future Admiral Bay offtake in exchange for metallurgical and beneficiation testwork.
Results from preliminary test work were announced in mid-December revealing recoveries of 88.27% zinc and 91.88% lead via simple, conventional flotation processing.
Additionally, minimal contaminants were found reducing any potential penalties in its concentrate sales.
Admiral Bay has an inferred resource of 170 million tonnes grading 4.1% zinc, 2.7% lead and 25 grams per tonne silver.
Shares in the company were unchanged at A$0.042 in early morning trade.