Brian Stockbridge, Non-Executive Chairman of NQ Minerals, commented:
“Extracting further value from our existing concentrates is a low-risk way to enhance revenues and shareholder returns.
“Now that we have successfully achieved commercial concentrate production at Hellyer, it is a natural extension to target downstream recovery of base and precious metals. Our pyrite/precious metals concentrate contains high grade gold, silver and zinc values and we believe this joint project could facilitate a significant increase our returns, whilst expanding our Tasmanian presence and creating a sound environmental footprint.”
NQ Minerals PLC (NEX:NQMI), a mineral processing, exploration and mining company has today announced that it has made a strategic investment in a private Tasmanian mining company, Tasmania Energy Metals Pty Ltd, to enhance the Company’s operations and prospects.
As part of this strategic investment Tasmania Energy Metals and NQ are evaluating whether it is commercially and financially viable to develop an integrated facility. This facility would utilise the main by product from the treatment of the pyrite/precious metals concentrate produced from the Hellyer Mine, being sulphuric acid, in the production of nickel-cobalt. Sulphuric Acid is the largest single cost in the treatment of nickel-cobalt contained in lateritic surface deposits. The facility would enable NQ to recover the precious and base metals contained in its pyrite/precious metals concentrate, which the Board believe to be more valuable to the Company than the sale of the pyrite.
NQ Mineral’s initial investment in Tasmania Energy Metals of £150,000 is in the form of a convertible loan note (the “Convertible Loan”) to finance the ongoing costs of assessing whether an integrated facility would be viable, including commencing environmental and metallurgical assessment.
Under the agreement, Tasmania Energy Metals has also granted NQ Minerals an exclusivity period up to 31 July 2019, in which NQ Minerals has the right to take up a binding option to acquire all of Tasmania Energy Metals’ assets, including the nickel-cobalt licenses and 100% control of the integrated minerals processing facility that is being developed, via the issue of Ordinary Shares in the Company to a value of £5.5 million.
The Convertible Loan has a repayment term of three years and carries no interest. NQ Minerals has the discretionary right to convert the Convertible Loan into shares of Tasmania Energy Metals during the time three-year term.
The long term strategy of the Company is to acquire assets which enhance the life of mine at Hellyer. As part of this strategy, NQ Minerals, through its subsidiary Pieman Resources Pty Ltd, recently won a competitive tender over the Chester Mine. Chester is a historical pyrite mine located just 25km from the Hellyer mill. This now forms part of license application EL5/2019. Once granted, the Company will commence exploration with a view to integrating the Chester mineralisation into its future production plans.