Bank syndicate to study Dairi zinc-lead project

Australian mining company Herald Resources Limited said Monday it intended to mandate one group of bank syndicates shortly to undertake formal due diligence studies for financing package to fund the construction of the Dairi zinc-lead project in North Sumatra.

Herald said it also anticipated that the subordinated finance for the project would be supplied by one or more smelting or metal trading groups in conjunction with offtake agreements for Dairi concentrates.

?Indicative offers have been sought and received from a number of different groups, who will be conducting due diligence studies from now into the June quarter, in order that these offers can be re submitted on a firm basis,? Herald said.

Herald also said it was currently studying the concentrate transport options from mine site to port following the recent heavy seismic activity on the South West coast of Sumatra.

?In the pre feasibility study we envisaged trucking concentrate to the established port of Belawan (near Medan city) on the North East coast,? Herald said.

Earlier, Herald planned to transport the concentrate via a slurry pipeline to a port to be established on the South Westcoast near the town of Singkil Baru (Aceh). The slurry pipeline required a far greater capital cost, but reduced operating cost.

?The study is not expected to delay financial or offtake agreement negotiations,? Herald added.

Herald has 80 percent stake in PT Dairi Prima Mineral, which runs the project, while state miner PT Aneka Tambang Tbk holds the remaining 20 percent. (Robert)